Investing in securities can be a complicated process, particularly for those who are new to the private investment market. One important player in the investment process is the Exempt Market Dealer (EMD). This article provides an overview of what an Exempt Market Dealer is and how they help investors navigate this often-complex market.
What is An Exempt Market Dealer?
An Exempt Market Dealer is a registered firm that is licensed to deal with securities in the exempt market. The exempt market is a market for securities that are not required to be registered with securities regulators and is generally limited to investors that meet various criteria. For example, eligible investors are those that earn an annual income of $75,000 or more individually or $125,000+ with a spouse or partner; or have $400,000 in net assets.
Exempt Market Dealers are responsible for helping investors identify investment opportunities in the exempt market and for facilitating the purchase and sale of these securities. They act as intermediaries between issuers (companies offering investment opportunities) of securities and investors–and are often involved in the due diligence process to ensure that investors are properly informed about the risks and benefits associated with each investment opportunity.
How Do Exempt Market Dealers Help Investors?
Exempt Market Dealers provide a number of important services that help investors navigate the exempt market. Some of the key ways in which they help include:
- Identifying investment opportunities: EMDs are responsible for identifying investment opportunities in the exempt market that meet the needs and objectives of their clients. This involves conducting thorough research and analysis of various investment opportunities and presenting these to clients in a clear way.
- Due diligence: Before recommending any investment opportunity, EMDs must conduct extensive due diligence to ensure that the investment is suitable for their clients. This includes assessing the financial health of the issuer, evaluating the risks associated with the investment, and ensuring that all necessary regulatory requirements have been met.
- Disclosure: EMDs are required to provide investors with all the necessary information about an investment opportunity, including the risks associated with the investment and any fees or charges associated with investing. This helps investors make informed decisions about whether to invest in a particular opportunity.
- Regulatory compliance: EMDs are subject to a number of regulatory requirements, including licensing, registration, and ongoing reporting obligations. By working with an Exempt Market Dealer, investors can be confident that they are dealing with a reputable firm that complies with all applicable regulations.
In summary, Exempt Market Dealers play an important role in helping investors navigate the complex and often confusing world of the exempt market. By providing a range of services, including identifying investment opportunities, conducting due diligence, providing disclosure, and ensuring regulatory compliance, EMDs help investors make informed decisions about their investments while minimizing the risks associated with investing in the exempt market.
Stay tuned for future blog posts that will address other frequently asked questions!
At Peak Multifamily Investments, we work with Axcess Capital Advisors (Axcess) as our Exempt Market Dealer. Axcess has been in the industry since 2011 and has a stellar reputation with investors and issuers in the private markets.
To learn more about the private markets and if investing in them is a suitable investment strategy for you, click on the button below to book a call with a registered investment advisor.
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About the Author:
Mark Baltazar, Co-Founder of Peak Multifamily Investments
Mark began his real estate investing career in 2014 focusing on single-family rehabilitation projects and single-family rentals. He then shifted to commercial multifamily in 2017, growing a portfolio of over $40 million in assets under management to date.
The multifamily strategy executed to date has included the acquisition of underperforming apartment buildings, improving, and repositioning them to a stabilized operating business – the same strategy the Trust will continue executing on.
Prior to real estate, Mark has extensive business experience spanning over 20 years, with 15 years as a partner in a brand strategy and analytics firm with clients that include some of the world’s largest consumer brands. In this role, Mark was responsible for the revenue growth of the firm and the delivery of strategic consulting services to help the firm’s clients achieve growth through new product innovation and strategic brand repositioning. Mark sold his remaining stake in the business in 2020 to enable him to remain hyper-focused on continuing to grow a private equity real estate investment business.
Mark’s 20+ years of strategic management experience and 10+ years of real estate investment experience has been an integral driver of the growth that Peak Multifamily Investments Ltd. has experienced to date and will continue to drive growth of the Trust into the future.