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    July 2012
    M T W T F S S
    « Jun   Aug »


    How Do You Spell Exempt?

    Marty Gunderson



    Based on the number of comments from the previous post, I gather there are more than a few people who do not know what the exempt market is.  I’m not overly surprised, given the lack of marketing there is, relative to the conventional investment market.

    There are three key elements of the exempt market that makes it unique.



    What’s in a name?

    The industry is aptly, but awkwardly, named exempt market because investments offered here are “exempt” from prospectus. You may recognize prospectuses. It’s the forest you receive in the form of a simplified prospectus, when you buy a Canadian mutual fund. These documents, which seem to be getting thicker and thinker, are filed and reviewed by the pertinent securities commissions.

    The exempt market space has its own disclosure documents, albeit contributing less to forestry stock valuations. Documents such as offering memorandums outline applicable risks as well as terms and conditions of investing.

    Restricted Entry

    Unlike GICs and mutual funds, only certain people or companies can purchase exempt market securities. Who are these special people?  Well that generally depends on where you live and your financial situation. Rules using limitations such as eligible investor and accredited investor are examples of who can purchase the investments.

    Where’s the exempt market store?

    Until recently, there wasn’t really any formal national distribution of exempt market products. The club of securities regulators decided to harmonize the rules and created the exempt market dealer.

    In the same way that mutual fund dealers sell mutual funds, the exempt market dealer offers… you guessed it… exempt market securities. These highly regulated dealers ensure their representatives are dispensing appropriate suitability advice. The dealers also have liquidity and bonding requirements to ensure they are financially stable.

    You’ve probably noticed that these points don’t necessary talk about the investments themselves. That’s the exciting thing about the industry; there are a wide variety of investments offered here. In the coming articles, I’ll try to address a few of them.

    Still confused?  No worries.  Here’s a video I did explaining it.  Hope it helps.


    Marty Gunderson is a self proclaimed Exempt Market geek. He has served in a variety of positions in the industry, from sales to issuer to dealer. He is the founder of, a site that highlights a few quality exempt market offerings.








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