Exempt Market Dealer

Regulatory

The Issuer of units in the Fund is an ‘Exempt Market Dealer’ (EMD) and is registered with the Securities Commissions of British Columbia and Alberta and will activate registration in Saskatchewan, Manitoba, and Quebec mid-2018. The Issuer shall apply to the Ontario Securities Commission for registration as an EMD in 2018. This registration allows the dealer to provide advice and deal in “Exempt Market Securities” to “Qualified Investors”. As an exempt market dealer, Pendfund Income Fund Inc. does not perform portfolio analysis in respect of securities that it does not directly distribute. Investors should obtain financial advice from a registered individual, or legal, or other qualified professional, to evaluate their portfolio. Pendfund Income Fund Inc. is a member of the Private Capital Markets Association of Canada.

Compliance

The Conduct of the EMD is governed as to policy and procedure by securities legislation. It is monitored and regularly audited for compliance by securities commission regulators. EMD’s are held accountable for all practices, are bound to follow strict code of policy and ethics and required by law to act in good faith and in the exclusive best interests of their clients. The EMD files audited financial statements and maintains minimum levels of working capital and insurance.

Proficiency

In order to obtain registration, the EMD must pass proficiency exams and be strictly qualified as to character and reputation to become licensed.

Function

The EMD is expert at underwriting and investment into exempt market securities. The license permits raising capital in various industries such as loan/debt products, real property, mining, oil & gas, technology and manufacturing, etc..

Dispute Resolution Mechanism

In the unlikely event a stalemate issue arises, there is a free of charge independent dispute resolution service with the Ombudsman for Banking Services and Investments. Disputes in amounts not greater than $350,000 are resolved by independent industry experts. Form more information regarding Ombudsman fir Banking Services and Investments, please click the link here.

What is an EMD?

An Exempt Market Dealer is a licensed securities dealer registered under legislation with a provincial Securities Commission in one or more jurisdictions in Canada. It deals in exempt market and other securities such as mutual funds.

 

The proponent of the Trust is registered as an Exempt Market Dealer (EMD) and is registered with the various provincial Securities Commissions in Canada within which it operates when issuing Trust Units. See ‘Regulatory’ below for more information.

What is the function of an EMD?

EMDs are licensed to act in two primary capacities in the capital markets:

  1. As a dealer or underwriter for any securities which are prospectus exempt, or
  2. As a dealer for any securities, including investment funds which are prospectus qualified such as mutual funds or prospectus exempt (pooled funds), provided they are sold to clients who qualify for the purchase of exempt securities.

The qualification criteria for exempt purchasers and exempt securities are found in National Instrument 45-106 and the regulatory framework for EMDs is set out in National Instrument 31-103.

How do EMD's differ from other securities dealers?

Other categories of securities dealers include:

  • Investment Dealers may act as a dealer in the public market for any type of security and any client;
  • Mutual Fund Dealers are restricted to dealing in prospectus qualified mutual funds;
  • Scholarship Plan Dealers are restricted trading only in scholarship plans and educational trusts;
  • Restricted Dealers are specialized dealers restricted to a particular product.

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