Three things to know about new “Exempt Market Dealer” registration requirements If you’ve recently attended an investment seminar or heard about an investment opportunity from someone who has actively solicited your interest, read on.
Recent changes to securities laws help ensure that only qualified persons can deal or advise with regards to securities (proficiency), that registered persons must be honest and of good repute (integrity) and that registered persons must be financially viable (solvency).
Unsure about what these changes mean for you as an investor? Here are three things to know:
- Subject to relying on an available exemption, as of September 28, 2010 anyone in the business of trading securities must have applied for registration with a local securities commission in order to sell investments.
- Individuals who are in the business of trading “prospectus-exempt” securities (meaning they are not required to be sold under a prospectus) are called “Exempt Market Dealers” or “EMDs”. All EMDs must be registered with their local securities regulator – in Alberta, this is the Alberta Securities Commission (ASC).
- If someone is not registered as an EMD but is promoting a prospectus-exempt security to you, they must provide you with disclosure that they are not registered and are prohibited from providing suitability advice with respect to the investment.
Here are some actions you can take to avoid surprises:
- Ask the person offering you an investment if they are registered. While this may feel awkward, you should know about their specific designations, professional qualifications and registration status.
- Consult with a person who is not participating in the deal, such as a lawyer, banker, accountant, financial adviser or someone else with business knowledge, before making any decision to participate in the investment.
These changes are designed to help protect investors from unfair, improper or fraudulent practices and enhance Alberta’s capital market integrity and efficiency.
Remember, it’s your money. Don’t be hesitant to ask questions and find out more about the individual or company offering you an investment. Comment on this blog... | About this Blog We’ve created this blog to present you with answers to some of the more popular questions we receive from investors. We'll have different subject matter experts blogging about what they know best and we'll update it as new blogs arise. We hope you'll find it interesting and helpful. Today's Blogger Hello, Don Rodgers here and I am the Public Information Officer for the Alberta Securities Commission (ASC). Before coming to work for the ASC, I was a trader and taught technical analysis. I also wrote for two on-line investment websites. As such, I have a great deal of interest in the securities industry and a desire to help answer questions which you may have. Here are some links I think you’ll find helpful:
Ask your question If you have a question you would like to see answered on this page, email them to questions@asc.ca. We may not use every question we receive but will concentrate on areas from which we receive the most inquiries. If you have a question related directly to your own situation, please contact ASC inquiries using our toll free number (1-877-355-4488) or email inquiries@asc.ca. If you have a complaint, email complaints@asc.ca or call 403-355-3888.
We encourage you to make use of our ASC resources to reduce your vulnerability to fraud, and to help you to become a better informed investor with some knowledge of how the markets work. Read our Helpful Brochures and Reading Material.
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