The British Columbia Securities Commission (BCSC) issued an order today making certain limited trade-based registration exemptions to persons that would otherwise be required to register as exempt market dealers in BC. Meanwhile, the Manitoba Securities Commission issued a similar order. As previously discussed, with the implementation of the new registration regime and National Instrument 31-103 Registration Requirements and Exemptions, trade-based registration exemptions that parallel prospectus exemptions available under National Instrument 45-106 Prospectus and Registration Exemptions are to be repealed on March 27, 2010.

Pursuant to the orders, effective March 27, 2010, an exemption from the EMD registration requirement will be available in both B.C. and Manitoba for persons trading in securities in reliance on certain prospectus exemptions under NI 45-106, specifically, section 2.3 ("accredited investors"), section 2.5 ("family, friends and business associates"), section 2.9 ("offering memorandum") and section 2.10 ("minimum investment amount").

The orders, however, apply only where certain conditions are met. Specifically, the person or company seeking to rely on the exemption in B.C.: (i) must not be registered in any jurisdiction, including a foreign jurisdiction; (ii) must not have provided advice to the purchaser with respect to suitability; (iii) must obtain from the purchaser a signed risk acknowledgement in the form prescribed by the blanket order; (iv) must not hold or have access to the purchaser's assets; and (v) must electronically file with the BCSC a current or updated information report in the prescribed form within ten days of relying on the exemption.

The Manitoba order, meanwhile, also includes a requirement, like the recent Alberta order published earlier this month, that the person relying on the exemption not have provided financial services to the purchaser at any time other than in connection with a prospectus-exempt distribution under the relevant sections. However, the Manitoba and B.C. orders do not include language found in the Alberta order imposing the express condition that the person relying on the exemption must not be registered or required to be registered. The BCSC And MSC also released accompanying guidance respecting their respective orders (see B.C.'s companion policy and Manitoba's guidance notice).

B.C. and Manitoba, which are the second and third of the "North West" jurisdictions to issue such orders after Alberta, are expected to be further joined by Saskatchewan, the Northwest Territories, Nunavut and the Yukon Territory, whose regulators have also announced their intention to issue similar orders.

For more information on the impact of the new registration regime on dealers trading in the exempt market, see our July 2009 publication: "Impact on Limited Market Dealers and Unregistered Dealers Trading in the Exempt Market".