Advisors distributing prospectus-exempt securities have gained access to a new source of information about exempt market investment opportunities, and a channel for promoting themselves among prospective investors in this market.
A new website that launched this week, called EMGateway Inc. (www.emgateway.com), aims to generate awareness about the exempt market and investment opportunities within the market, and to connect investors with exempt market issuers, dealers and registered representatives.
“It’s an educational portal with a ton of information,” says Milo Anderson, CEO and founder of Calgary-based EMGateway. “We’re really helping to protect consumers and support the industry. I think the exempt market industry has [suffered from] a lack of awareness, and it’s been undervalued. With the turmoil that’s currently occurring in public markets, I think it’s important for consumers to know there are other options available.”
Since exempt market products aren’t publicly listed, it can be a challenge to find information about these investments and to compare the available options. Even advisors struggle to find information about these investments, according to Anderson.
“We thought, why not amalgamate all the resources in one place,” he says. “[Reps are] going to have one source where they can get to know their product really well…and they’ll get to know the differences between various products.”
The goal, he adds, is educate investors and to make it easier for them – and their advisors – to conduct due diligence on exempt market securities. He urges advisors to use the site to explore the options, and to direct clients to the site to conduct their own research.
“It’s important for the consumer to do their own due diligence and to ask questions,” he says. “There’s always risks in every investment.”
Information about the investments featured on EMGateway is uploaded directly by the issuers. They must provide a detailed description including certain mandatory information about the investment, and the content must be approved by the exempt market dealers licensed to distribute the investment before it gets published.
Investors can search for investments on the site using such criteria as: the amount they want to invest, their time horizon, the type of investment, the location of the issuer and whether it’s RSP-eligible, among other things.
They can also browse the profiles of exempt market dealers and dealer reps. Reps can choose to upload a photograph, and can provide information in their profile about their business, location and industry experience.
Once investors identify an investment on the website that they’re interested in purchasing or learning more about, they can access a list of local registered reps eligible to distribute that particular investment. For a monthly fee of $39 per investment per month, reps can have their name and profile included in this list in order to get exposure among such prospective clients.
The site, which launched to the industry on Thursday, will offer free access to all members of the industry for the first three months. It will launch to the public on June 19th.