What is an EMD?
An Exempt Market Dealer or EMD is a registered and qualified dealer of exempt market securities or private investments. EMDs are registered under provincial securities legislation meaning they are required to meet compliance standards, code of conduct requirements and proficiency standards.
Prior to National Instrument 31-103, introduced in September 2009, Exempt Market dealers had only a few obligations such as filing Offering Memorandums with provincial Securities Commission, even though they were not reviewed.The creation of Exempt Market Dealers made it possible to ensure full registration of dealers and provide a means to ensure sales representatives follow uniform rules and regulations while decreasing the risk for investors.
Exempt Market Dealers ensure investments offered to clients are sound and the representatives selling them are competent professionals acting with the best interest of the clients.The EMD acts as a safety net for investors by:
- Ensuring full compliance with all regulation, both federal and provincial.
- Employing a Chief Compliance Officer.
- Using only licensed Dealing Representatives.
- Selling only those products offered by the Dealer.
Read more from the Exempt Market Dealers Association of Canada.
Why the Exempt Market?
Investing in the Exempt Market provides the opportunity for investors to invest in tangible assets previously reserved for institutional investors and high net worth individuals. Raintree Financial Solutions takes the time to fully research the products we offer to maximize the likelihood of strong returns.
What is a Dealing Representative?
In September 2009, the Canadian Government introduced new legislation to reform the Exempt Market and also nationalize parts of the Securities Act.
The new federal regulations were established in 2009 to achieve the following objectives:
- To apply blanket reforms to the distribution of Exempt Market products to investors.
- To increase and strengthen the standards which helps to manage the risks for investors.
- To introduce proficiency requirements for both sellers and dealers alike.
Included in this reform was the creation of the designation Dealing Representative. This ensures that anyone offering Exempt Market products to clients:
- Was approved for registration with the Securities Commission(s) in the Province(s) they are conducting business.
- Has successfully completed either the Canadian Securities Course, or the specialized Exempt Market Products exam.
- Is registered with an Exempt Market Dealer.
How have Exempt Market Dealers changed the Exempt Market?
Prior to 2009, exempt product sales requirements varied by province. Now anyone in Canada (with very limited exceptions) wishing to sell exempt products must have the same proficiencies, be registered with a regulator and supervised by a Registered Dealer.
With Exempt Market Dealerships such as Raintree Financial Solutions committed to providing the highest possible level of service and professionalism for Dealing Representatives and their clients, the Exempt Market is now a viable option.
How Does Raintree Financial Solutions mitigate risk?
We have a comprehensive risk mitigation process in place to help protect investor capital. Raintree reviews all new products internally. Those that show promise and appear aligned with our values (i.e. investors receive priority treatment in the profit structure), undergo a more rigorous internal review. Those products, which then still appear to be a good fit for our product shelf, are sent for an independent third party review. We use experts in this area and they in turn, rely on a highly competent staff with deep knowledge in many fields. After we receive their written report, we again do an in-depth internal analysis. Then, and only then, do we make the decision whether to offer the product through Raintree Financial Solutions.
What structures and asset classes are available?
Investment structures in the Exempt Market include income/yield, both short and long-term growth, and structures designed specifically for tax efficiency.
There is a wide range of assets classes available on the Raintree investments shelf including Mortgage Investment Corporations (MICs), Real Estate (including land banking, vertical development, farmland funds), and private Real Estate Investment Trusts (REITs), mineral exploration, Solar Energy Power Generation, and participation in Oil and Gas Exploration.
What does Raintree Financial Solutions do for investors?
As a registered Exempt Market Dealer, Raintree Financial Solutions facilitates the purchase and sale of select exempt products in the Canadian marketplace.We do not hold client assets or investments. We gather information, track and report on any investments you have with providers of exempt products. Your money and your investments are never housed with us. We track what you buy and sell based on our relationship with you and the information we receive from exempt product providers.
Can I put my investments in registered plans?
Most of the products Raintree Financial Solutions distributes are eligible to be held in registered plans. We have arrangements with Olympia Trust or Canadian Western Trust to offer you the following types of accounts or plans:
- Locked-in Plans
What products and services are offered by Raintree Financial Solutions?
Raintree Financial Solutions distributes products to investors who qualify for one of the available exemptions under Canadian Securities laws. The descriptions, features and legal information relating to the structure of the exempt products we distribute are contained in offering documents. Investor rights and duties are also contained in the offering documents and subscription agreement. Please be sure to read them carefully.
Does Raintree Financial Solutions provide financial planning (or other) services?
Certain Raintree Financial Solutions Dealing Representatives may offer insurance, financial planning or other services. These are not Raintree Financial Solutions services, and are offered as outside business activities by your Dealing Representative. Raintree Financial Solutions does not supervise these services. For full details on what this means to you, please speak to your Dealing Representative or to the Compliance Department at Raintree Financial Solutions.
What are the risks of Exempt Market investing?
All investing comes with risks. Raintree Financial Solutions strives to mitigate risk with our extensive due diligence process.
No regulatory authority has assessed the merits of any of the products sold by Raintree Financial Solutions or its representatives. The products you are buying are not listed on any stock exchange and they may never be. It is possible that you may never be able to sell these products.
The product issuer is non-reporting and does not have to publish financial information or notify the public of changes in its business. You may not receive ongoing information.
Every product sold by Raintree Financial Solutions is considered by Securities Regulatory authorities to be high risk. Certain features of certain products may mitigate the risk, but these should be discussed in detail with your Dealing Representative.
Additional risks associated with the investment you are purchasing are set out in the Offering Memorandum and Subscription Agreement provided with your purchase. We ask and expect that you will read offering and subscription documents carefully before purchasing.
What reporting is available?
Raintree Financial Solutions issues statements at least once every 3 months. If you request more frequent statements, or there are transactions in your account in a particular month, you may receive a statement more frequently.
Statements contain the following transaction information during the period covered:
(a) the date of the transaction;
(b) whether the transaction was a purchase, sale or transfer;
(c) the name of the security purchased or sold;
(d) the number of securities purchased or sold;
(e) the price per security paid or received by you;
(f) the total value of the transaction.
Statements also contain the following account information during the period covered:
(a) the name and quantity of each security in the account;
(b) the market value of each security in the account;
(c) the total market value of each security position in the account;
(d) any cash balance in the account;
(e) the total market value of all cash and securities in the account.
How does Raintree Financial Solutions approach due diligence?
We take due diligence very seriously, employing a third party strategy that ensures the highest likelihood of protection of client investments and minimizes conflicts of interest. Raintree Financial Solutions believes that due diligence in product and partner selection is what allows our company to provide, and insist on, a standard of excellence that exceeds expectations.
What if I have a dispute?
Raintree Financial Solutions offers independent dispute resolution or mediation service to its clients. All resolution and mediation services are at the expense of Raintree Financial Solutions.
What are my responsibilities as an investor?
At Raintree Financial Solutions, we pride ourselves on being client-focused, industry leaders. We work hard to build strong relationships with our clients, but relationship building is a cooperative effort. In order to provide you with the best service and the most suitable investments we need your assistance.
We ask all clients for the following:
- Keep us up to date – You provide full and accurate information at the onset of our relationship. We ask that you inform us whenever there has been a change to your information that could affect your income, investment objectives, risk tolerance or net worth.
- Carefully review the information provided – Our Dealing Representatives have been trained to deliver the information you need to make your investment decision prior to the time of sale. We expect that our clients will carefully review sales literature and legal documents provided by the firm so as to fully understand the investments.
- Seek outside counsel - Where appropriate, we expect that you will seek additional advice from other professionals such as lawyers or accountants as we cannot provide legal or tax advice.
- Ask questions - We encourage you to ask questions and request information from Raintree Financial Solutions and our Dealing Representative to resolve questions about your account, transactions or investments, or your relationship with us and your Dealing Representative.
- Stay on top of your investments – At Raintree Financial Solutions, we expect you to review all account documentation provided by us and report any inaccuracies or issues immediately.