Regulators should not confuse expanding access with the meaningful, continuous disclosure of public markets, writes J. Ari Pandes.Melissa Tait/The Globe and Mail
J. Ari Pandes is an associate professor of finance and an associate dean at the University of Calgary’s Haskayne School of Business.
Across Canada, securities regulators are expanding how individuals can invest in private, exempt markets. Eligibility rules are being reconsidered and new pathways are opening outside the prospectus regime. At the same time, public markets – built around continuous disclosure, liquidity, and oversight – have seen comparatively modest structural change in their central role in capital formation. The contrast is difficult to ignore.
Greater access to private markets is not, in itself, a policy solution. Regulators should not confuse expanding access with the meaningful, continuous disclosure of public markets. Access without disclosure shifts risk rather than managing it.
To be fair, regulators are not ignoring the public markets. The Canadian Securities Administrators has advanced a wide-ranging reform agenda that includes several targeted public-market initiatives.
A permanent, well-known seasoned-issuer framework is intended to accelerate capital-raising for established companies, and long-standing mining disclosure requirements are being modernized. These reforms respond to genuine frictions associated with being a public company and are sensible issues to address.
But at the same time, some of the most consequential proposals move in a different direction. Chief among them is a proposed self-certified investor exemption, which would allow individuals to invest in private placements based on education or experience rather than wealth alone, subject to investment caps and written risk acknowledgements.
Opinion: Should retail investors really get access to private markets?
While the exemption may have merit in principle, the regulatory direction is clear. The policy changes are meant to broaden retail participation outside the prospectus system, channeling household savings toward markets that are opaque and illiquid by design, rather than into the continuously disclosed public markets Canada has historically relied on.
The exchanges tell a complementary but more modest story. The Toronto Stock Exchange has made sensible housekeeping changes to its Company Manual, clarifying dividend-notice requirements, tax-reporting expectations and documentation standards. It has also proposed a refresh of listing categories, moving away from dated industry labels and recalibrating certain sector thresholds.
These steps improve clarity and administration, but they have done little to change the central calculus confronting growing companies: whether the cost, uncertainty and pace of a public listing are justified relative to remaining private.
Why does this sequencing matter? Because private and public markets are built on fundamentally different foundations. Private markets rely on negotiated disclosure, bespoke governance arrangements and limited exit opportunities. These characteristics are not flaws – they are features that serve important economic functions and suit knowledgeable investors who can assess risk and absorb potential losses. They are far less compatible with broad retail participation. Expanding eligibility does not change the underlying nature of these markets.
Recent enforcement experience helps illustrate the point. Between June, 2025, and February, 2026, Canadian regulators reported working together to deactivate 7,586 fraudulent investment and crypto websites targeting Canadians. That figure is not an indictment of private capital itself, nor a claim that fraud is absent from public markets.
Instead, it underscores a well-established reality that retail harm tends to flourish in environments where information is scarce and oversight is limited. Public markets are explicitly designed to mitigate these risks through disclosure, surveillance and accountability.
Advocates of wider exempt-market access often argue that Canada’s public markets have become too burdensome for innovative firms, pushing entrepreneurs toward private financing. There is truth in that diagnosis. But widening retail access to private markets is not a solution to public-market stagnation. It reallocates risk to Canadian households without addressing the underlying causes that make a public listing less attractive in the first place.
A more coherent approach would begin with a simple objective to make going public – and remaining public – more attractive than repeatedly raising capital privately, while preserving the investor protections that justify broad access. The main policy tools and reform directions needed are largely already on the table. What has been missing is clearer sequencing of priorities.
Public-market modernization should focus on clarity and proportionality: disclosure requirements grounded in financial materiality and scaled to issuer size and risk; fewer duplicative filings across jurisdictions; and more predictable timelines that allow companies to plan with greater confidence. Lower friction does not require lower standards – it requires clearer ones.
Finally, where private-market exemptions allow retail investors to participate, investor-protection safeguards should not end at the point of sale. Proportionate disclosure, meaningful comparability across offerings and scaled post-investment reporting would help ensure that expanded access does not come at the expense of informed decision-making.
This is not an argument against private capital or regulatory experimentation. It is an argument about priorities. Expanding access without reinforcing disclosure risks confusing participation with protection. Getting that distinction right should be central to how regulators think about the future of Canada’s capital markets.