6 Reasons to Work With an Exempt Market Dealer
Before we talk about reasons to working with an Exempt
Market Dealer (EMD), let’s first discuss why value is critical.
If you found a glass Coke bottle on the desert sand, even if
you had never seen such an object before, you would perceive
that it had been made by an intelligent entity. So it is with business:
its complexity is proof of its design.
The Coke bottle surrounds the actual product a carbonated,
sweet, dark fluid. Yet, that bottle has become ubiquitous as a
global brand. Making money is a result of all the little actions that
get the strategy done: the brilliant management of cash flows, the
production expansion, the supply chain’s meticulous design, and
prompt delivery to the world market of customers.
So how do you determine the value of that Coke bottle
and then of the whole enterprise that produced it? How do you
capture the worth of all those years of work by the owners and
the employees? Coke, like Facebook and other public companies
have public stock markets to help determine value. But as we
watch the Facebook IPO wobble and drop we can see that value
is not set in stone – in public or private markets. But why then does
Coke have clearer value which has endured over the decades?
For many Canadian business owners of private companies
wishing to sell their company or to attract investors, an exempt
market dealer (EMD) can help them unlock their true value. More
than any time in recent history, the stability of the Canadian
economy is attracting a great deal of investment in search of the
right business opportunities.
Investors are scouring Canada for that company with
Coke bottle on the desert sand value and the real question is
whether they will find it – and if they will find you. Investors
want to find business owners who put deep management
competency and time into their business, who can explain its
worth in elegant terms and who understand the relationship
with private equity or investors.
To help those investors find and then evaluate your companies
coke bottle type value one of the best tools available is to use an
EMD. Owner–operated companies, established private and public
companies, and companies with requirements beyond bank or
credit financing, or ‘friends and family’ funding will find huge value
in the capital raising expertise of an EMD.
Here are six reasons to use a registered EMD:
1. Legal Protection securities regulators in each jurisdiction
of Canada license EMDs and prescribes compliance and
regulatory standards for an EMD to conduct their securities
dealer services with clients.
2. Peace of Mind by ensuring your financial advisors are
registered as an EMD, you can trust they are appropriately
regulated and managed by securities professionals who
adhere to high standard of compliance and client service.
EMDs are accountable for their compliance practices, acting
in good faith and acting in the best interests of their clients.
3. Proficiency EMDs pass a series of exams to ensure
proficiency. In addition, compliance rules are in place to
ensure that a strict code of conduct and proper client
processes are followed to ensure fair and transparent service.
4. Best Practices Ensured the conduct of an EMD is set by
regulation including requirements for proficiency, capital and
operational compliance requirements. EMDs are required
by law to have audited financial statements, a minimum of
$50,000 working capital, and periodic statements to clients
if there are transactions undertaken on their behalf, as well
as insurance in place to cover a wide range of client and
5. Broader Capabilities EMDs offer access to sophisticated
business advisers and a pool of exempt market investors
minimizes many of the complicated and expensive features
of the public equity markets. EMDs are experts in the
purchase and sale of exempt market securities and often
specialize in raising capital in particular industries: real
estate, construction, mining, oil & gas, food technology,
biotechnology, manufacturing, etc. EMDs are allowed to
offer clients a far wider range of financial opportunities than a
financial advisor doing M&A or sale of companies.
6. Dispute Resolution Mechanism If there is an issue with your
EMD the firm will have internal mechanisms to address client
concerns and if necessary an independent dispute resolution
option will be available to you.
For more information contact:
By Jacoline Loewen, EMDA Director and Director, Loewen & Partners Inc.