What is an Exempt Market Dealer?
November 15th, 2022
Exempt Market Dealers (EMDs) are registered securities dealers in the business of distributing prospectus exempt securities to eligible investors. They might focus on a single industry – for example, mortgage investments – or they might offer securities that represent the full spectrum of industries.
“Prospectus exempt” means you won’t get a prospectus that’s been reviewed by securities regulators before purchasing securities. Instead, a business can sell securities if conditions set out in a prospectus exemption are met.
The most popular Prospectus Exemptions
Offering Memorandum – a shortened version of a prospectus, but it’s not reviewed by securities regulators.
Accredited Investor – individuals can qualify by meeting or exceeding income and/or asset thresholds, either by themselves or with a spouse.
Family, Friends, and Close Business Associates – individuals who can demonstrate they fit these definitions may qualify.
Can I sell my Prospectus Exempt Securities?
Prospectus exempt securities aren’t publicly traded. Purchasers may not be able to sell their exempt securities when they want to, or at all.
What you can expect
If you are eligible to purchase prospectus exempt securities, your EMD will take steps to know your circumstances and financial objectives. Generally, your EMD must determine that a proposed purchase (or sale) is suitable for you in all your circumstances, and in your best interest, before putting your order (or its recommendation) into action. You can expect to get confirmations of purchases and sales, and regular and annual statements about your investment account.
Exempt Market Dealers must meet entry and ongoing requirements
Before it was granted registration, your EMD met financial viability and business conduct competency standards, and was not “objectionable” based on its history. While registered, your EMD must stay proficient, stay financially viable, and comply with requirements intended to protect you. Avoid or effectively manage conflicts of interest. Determine suitability of each investment action. Stay up-to-date in knowing you and knowing each investment they offer. Account to you about your transactions, your account’s performance, and direct and indirect investing costs. Handle your complaints in a timely and thorough way, offering you access to the Ombudsman for Banking and Investment Services. Manage all the risks of its business.
Accredited Investors can join Finhaven™ Private Markets
Finhaven™ Private Markets is operated by Finhaven Capital Inc., a registered exempt market dealer and authorized marketplace and clearing agency in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario in Canada. We offer a range of prospectus exempt investments, with a focus on mortgages, real estate, and entertainment. We use the Finhaven™ Investment Platform for your online account and your digital securities. We will soon offer secondary trading among our investors.
