Exempt Market Dealers – doing their part to protect investors

The Benefits of Scrutiny

I promised in my last post that I’d explain why we feel the new Exempt Market Dealer (EMD) regulations are so important. After all, we are already committed to best practices, so why the excitement over regulations that will help other exempt market products improve their standards?

(2011 update on Exempt Market Regulations)

I believe strongly in helping my investors become informed, but the reality is not everybody has the time, desire or expertise to perform the level of scrutiny necessary to make them feel comfortable. That is where regulations that set some minimum
standards come in. EMD regulations will help investors feel more omfortable investing in an exempt market product, because they know it has been independently scrutinized.
And what’s the benefit for those of you who’ve already invested in an Exempt Market Product (EMP)?

Well first, it is important for investors to have independent verification of a product. Now, in addition to the due diligence you did before investing, you will have independent verification that you have invested in a sound product. Secondly, those investors who are new to exempt market products make things better for us all –more investors means funds have better economies of scale for the projects they invest in. In short, Exempt Market Dealers (EMDs) lead to more success for Exempt Market Products (EMPs), like the funds created by Bailey Funds, and that’s a good thing for all of us!

Over the next few months we will be connecting with third party Exempt Market Dealers in Alberta and Ontario (one weakness of the regulations is that a fund can be its own EMD – we don’t feel that provides our investors with the independent scrutiny they deserve – so we will only work with third party EMDs). We’ll be introducing our product to these third party EMDs, and then opening our books so that they can scrutinize our product according to the strict new federal regulations.

In the meantime, we’re excited to be preparing for expansion internally!

Note: After last post I had some feedback that a back to basics primer on what an exempt market product is, as compared to say a stock, bond or public market product, would be welcome…so I’ll get that posted soon.

Wishing you prosperous opportunities, today.