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 BC, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia 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).