Frequently Asked Questions
What is an Exempt Market Dealer or EMD?
An Exempt Market Dealer (EMD) is a firm that has been registered to distribute investment securities that are exempt from prospectus requirement. These investments are often referred to as “private capital” because they aren’t publicly traded like other stocks and securities.
An EMD must meet regulated standards that ensure they know their investments, know their clients, maintain appropriate knowledge and proficiencies, resolve complaints in a timely fashion, carry reasonable insurance, and most importantly, treat their clients “fairly, honestly, and in good faith”.
Information on EMDs and their regulatory obligations can be found at your local Securities Regulatory Authority, the National Exempt Market Association, or the Private Capital Market Association of Canada.
What makes private capital investments different from publicly trades stocks?
In Canada, the companies you invest with are not allowed to issue securities unless they file a prospectus, which can be a very expensive process and significantly increase the cost of capital.
Private capital investments are different because they can be purchased with an exemption from the prospectus requirement, which gives Canadians access to a unique investment class that acts and performs differently than traditional investments.
Private capital investments can allow investors to acquire funds or companies backed by tangible assets and specialized capital in unique investment opportunities.
Are private capital investments more or less risky than publicly traded stocks and mutual funds?
All investing is risky and that includes private capital investments in the exempt market. One of the reasons that private capital performs differently than public stocks is that there are very limited resale rights. This is often referred to as a “lack of liquidity”. It’s also one of the primary risks in the exempt market. The generally higher returns in exempt market offerings are due to risks such as this. In addition to illiquidity, there will always be other risks to investing. Our dealing representatives will help you understand both the risks and benefits of each private capital investment we distribute so you can make informed decisions that are right for you and your family, based on a sound assessment of your financial circumstances and aspirations.
How can I purchase private capital investments if they are not traded on an exchange?
Almost all Canadian investors can qualify to purchase most of the investments we distribute. Your dealing representative will help you determine whether or not you qualify for one of the several exemptions these securities may be sold through.
More importantly, your dealing representative will aid you in determining if the private capital investments we have available at Charterhouse Prime can help you reach your investing goals, fit your needs and are suitable for you to invest in.
What is an “accredited” investor? Why the designation? Are your offerings open to “Non-accredited” investors?
Accredited investor definitions can vary from province to province. The designation is given to denote individuals who are high net-worth, high earning or who are highly knowledgeable about the Canadian Financial Securities industry.
Accredited investors can have more flexibility in dealing in the exempt markets as they are seen as being less susceptible to certain risks associated with these types of private offerings. Most of our offerings are open to ‘non-accredited’ investors, sometimes called ‘eligible investors.’
The securities commissions in each province also have differing rules governing ‘eligible investors’ and it is best to discuss these exemption options and regulations with one of our dealing representatives.
Are private capital investments RRSP, RRIF, RESP, or LIRA eligible?
Yes. The investments that Charterhouse Prime distributes can be purchased into a registered plan.
Where can I find more information?
Your best resource for further information on the Private Capital Market and investing with Charterhouse Prime is through your dealing representative. This individual will work directly with you to help you find what solutions are right for you.