The principal stated purpose of Canadian securities legislation is to preserve the integrity of capital markets and to protect the investing public. In Canada, there is not yet federal legislation relating to the marketing and sale of securities. Instead, each province and territory has its own legislation which regulates the marketing and sale of securities in that province or territory, and the provincial securities regulators have formed the Canadian Securities Administrators to consider and adopt national policy statements, called National Instruments, to harmonize securities law and regulation across the country.


Securities markets in Canada are similar to those in the United States, although significantly smaller in size and volume. Recently, public markets have been restructured in an effort to ensure a strong exchange system for Canadian capital markets participants.

In addition, very significant amounts of capital are raised in what is referred to as the “exempt market.” This market exists because certain trades in classes of securities and trades to certain types of purchasers have been exempted from the detailed filing and prospectus requirements of the securities legislation. Securities issued in this manner may only be resold without a prospectus if a further statutory exemption is available or an exemption ruling is obtained. This is sometimes referred to as the “closed system.”

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