Private Placements to Québec "Permitted Clients" Again Possible Without Triggering Reporting Issuer Concerns

The recent adoption of Multilateral Instrument 51-105 (MI 51-105) in each province and territory of Canada (other than Ontario), which creates new reporting obligations for issuers quoted on the U.S. over-the-counter markets, had the unintended consequence of possibly limiting private placements into Canada (except Ontario).

Québec just issued a blanket order (attached), which essentially eliminates this concern as long as one of the conditions mentioned in the order is satisfied, including that promotional activities only concern a "permitted client" within the meaning of Multilateral Instrument 31-103, which includes virtually all "accredited investors" (see attached Schedule). Private placements can therefore again be marketed and sold to such permitted clients in Québec as before with no consequences to issuers under MI 51-105.

Similar blanket orders are also currently being discussed with, or contemplated by, regulatory authorities of other provinces and territories that adopted MI 51-105.