National Instrument 31-103 Registration Requirements, Exemptions and Continuing Obligations (NI 31-103) was introduced in 2009 by the Canadian Securities Administrators (CSA) to establish a consistent registration and compliance regime across Canada. NI 31-103 harmonized the registration, conduct and ongoing compliance requirements for each of the provincial securities commissions (excluding Quebec). One of the most significant changes introduced by NI 31-103 was the launch of the Exempt Market Dealer (EMD) category of registration.
What is an EMD
An EMD is a securities firm that is registered with one or more provincial securities regulators to distribute prospectus exempt securities to clients that qualify for certain exemptions under National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106). These exemptions under NI 45-106, not only restrict who can purchase exempt securities, but in certain provinces, there are minimum and maximum purchase thresholds that could restrict how much a person can actually buy.
Exempt securities are often referred to as “private capital” because they are not publicly traded and are often “illiquid” as they do not reside on a public exchange or stock market and cannot be sold through a secondary market – which is why they are deemed “high risk”.
Axcess Capital Advisors Inc.
Axcess Capital Advisors is registered as an EMD in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario with its principal regulator being the Alberta Securities Commission (ASC). The firm ensures it complies with the full regulatory requirements of securities dealer regulation, including:
- educational proficiency for its registered individuals and its chief compliance officer
- minimum capital and excess working capital
- audited financial statements
- record keeping
- Know Your Client (KYC) obligation
- trade suitability obligations
- compliance systems and internal control mechanisms
- disclosure of referral arrangements
- disclosure of conflicts of interest
- comprehensive policies and procedures manuals
- trade confirmations and client statements
- procedures for client complaint handling
- an independent dispute resolution service
- maintaining adequate insurance coverage to protect the firm and its clients
More information on EMDs and their regulatory obligations can be found by going to the website of your provincial Securities Regulatory Authority. General information about the exempt markets can also be found on the website of the Private Capital Market Association of Canada (PCMA).
Why Invest in Private Capital Market Securities
Axcess Capital Advisors Inc.
Let us assist you in Building Wealth.
Grow your return potential through diversification. Axcess Capital Advisors is dedicated to helping its clients and other investors add to the growth potential of their portfolios through diversification in asset classes other than stocks, bonds and cash.
Building wealth requires a well-balanced, diversified portfolio that will help protect your investments from market ups and downs. Having exposure to investments that are non-correlated to the public markets could benefit your portfolio by adding the potential for higher, risk-adjusted returns.
Exempt securities provide exposure to private companies or alternative investments that are not traded on a public market and can be sold without a prospectus, which is mandatory for publicly traded investments. Exempt Securities include, for example, debt, equity, asset-backed securities, Real Estate Investment Trusts (REIT), and Mortgage Investment Corporations (MIC).
Axcess Capital Advisors offers select exempt products that can bring an additional level of diversification to a traditional portfolio – thereby enhancing growth by harnessing the possible higher-return potential that can come from adding alternative investments to your portfolio.
Investors should be aware that there are many risks associated with exempt securities and that they may not be suitable for everyone. To find out how you may benefit from exempt securities, please contact us directly to discuss the risks associated with high-risk securities and whether or not they are suitable for you.
What are Exempt Market Securities
When companies (issuers) sell securities such as stocks, options or bonds through the public markets, they are usually required to file a prospectus. A prospectus is a regulated document that describes the investment and the associated risks to the investor. Exempt Market Securities are different because they can be sold without a prospectus and you may receive an Offering Memorandum instead. Exempt securities are also referred to as “private placements” or “exempt distributions”.
Buying an investment without a prospectus means you may not get as much information to base your decision on and as a result you may be taking more risk with your money. There are other risks associated with exempt securities including:
- Risk of loss – You could lose your entire investment
- Liquidity risk – You may not be able to sell your investment when you need or want to even in an emergency. An investment that is not liquid usually can’t be sold in a short period of time and turned into cash, and in some cases you may not get your money back until the investment matures.
Axcess Capital Advisors is registered in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario with its principal regulator being the Alberta Securities Commission. More information on EMDs and their regulatory obligations can be found on the website of your provincial Securities Regulatory Authority or on the website of the Private Capital Market Association of Canada.
Conflicts of Interest
Effective June 30th, 2021, Canadian Securities Administrators (“CSA”) have implemented new regulations called Client Focused Reforms (“CFR”) which apply to all registrants in the Canadian securities industry, including IIROC, MFDA, Exempt Market Dealers, advisors, portfolio managers and Dealing Representatives. These regulations apply to Axcess Capital Advisors Inc. (“we”, “us”, “our “, or “Axcess”) which is registered as an Investment Fund Manager (“IFM”) and Restricted Portfolio Manager in Alberta, and an Exempt Market Dealer (“EMD”) in Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan.
The purpose of the Client Focused Reforms is to better align the interests of an advisor with the interests of clients. The CFRs are based on the fundamental concept that Dealing Representatives and Dealers should put client interests first when making investment recommendations. One key requirement of the CFRs relates to how Dealers deal with conflicts of interest. Dealers must implement policies, procedures, and controls to demonstrate that they have addressed material conflicts of interest in the best interests of YOU the client.
Pursuant to the new regulations, this Conflicts of Interest Disclosure is provided to you as a client of Axcess to ensure you understand existing and reasonably foreseeable material conflicts of interest that affect your interests as a client of Axcess Capital Advisors Inc.
Click link below to read full disclosure document
“Client Notice regarding Client Focused Reforms effective June 30, 2021”