STEVLOC is a boutique Exempt Market Dealer headquartered in Toronto, Ontario.
The "exempt securities market" in Canada describes the portion of the capital markets for which certain exemptions are provided under provincial securities legislation from the full requirements of prospectus disclosure and certain retail client sales requirements. This section of the capital markets is also known as the Private Capital Market.
Examples of activity in the exempt market include:
Generally, securities offered to the public in Ontario must be offered under a prospectus, which is a document that provides detailed information about the security and the company offering it. However, there are some exceptions to this rule that allow securities to be offered without a prospectus, called prospectus exemptions. These prospectus exemptions can help a company raise money without the time and expense of preparing a prospectus.
Investors who buy securities through prospectus exemptions generally do not have the benefit of ongoing information about the security that they are buying or the company selling it. As well, they often do not have the ability to easily resell the security.
Exempt Market Dealers (EMDs) are fully registered securities dealers who engage in the business of trading in prospectus exempt securities, or any securities to qualified exempt market clients. EMDs may focus on certain market sectors (e.g. oil and gas, real estate, minerals, technology, etc.) or may have a broad cross sector business model. Clients of EMDs include companies, institutional investors, accredited investors (sophisticated or high net worth individuals who are eligible to trade securities in the exempt market), or eligible investors who are qualified to purchase exempt securities pursuant to an offering memorandum.
EMDs provide many valuable services to small, medium and large businesses, investment funds, merchant banks, financiers, entrepreneurs, and individual investors, through their ability to participate in the promotion, distribution and trading (i.e., buying and selling) of prospectus exempt securities, as either a principal or agent.
EMDs are subject to full dealer registration and compliance requirements and are directly regulated by the provincial securities commissions. EMDs are required to meet all dealer obligations which include: educational proficiency, capital and solvency, insurance, audited financial statements, know your client, know your product, trade suitability, compliance systems, record keeping, client statements, trade confirmations, disclosure of conflicts of interest and referral arrangements, etc. The EMD category of registration exists in all provinces and territories of Canada.
Owner–operated companies, established private and public companies, and companies with requirements beyond bank, credit or ‘friends and family’ financing will value the expertise of an Exempt Market Dealer (EMD).
Legal Protection In Ontario, the Ontario Securities Commission registers dealers and prescribes compliance and regulatory standards for an EMD to conduct their securities dealer services with clients.
Peace of Mind
By ensuring your financial experts are registered as an EMD, you can trust they are appropriately regulated and managed by securities professionals who adhere to high standard of compliance and client service. EMDs are accountable for their compliance practices and acting in good faith and in the best interests of their clients.
EMDs pass a series of exams to ensure proficiency. In addition, compliance rules are in place to ensure that a strict code of conduct and proper client processes are followed to ensure fair and transparent service. Also, EMDs must file audited financial statements, and maintain minimum levels of capital and insurance.
Best Practices Ensured
The conduct of the EMD is set by regulation and the EMD must earn a license. EMDs are subject to proficiency, capital and operational requirements. EMDs are required by law to have audited financial statements, a minimum of $50,000 working capital, and periodic statements to clients if there are transactions undertaken on their behalf, as well as insurance in place to cover a wide range of client issues.
The EMD offers a pool of sophisticated investors and minimizes many of the complicated and expensive requirements of the public equity markets. EMDs are experts in the purchase and sale of exempt market securities and often specialize in raising capital in particular industries: real estate, construction, mining, oil & gas, food technology, biotechnology, manufacturing, etc. EMDs are allowed to offer clients a far wider range of financial opportunities than a financial adviser doing M&A or sale of companies.
Dispute Resolution Mechanism
If there is an issue with the financial adviser, there is an independent dispute resolution option available. This ensures that any client complaints are resolved by independent industry experts focused on a win/win solution.
A Dealing representative may act as a dealer or an underwriter in respect of a security that the individual’s sponsoring firm is permitted to trade or underwrite.
A dealing representative of an exempt market dealer must not act as a dealer on behalf of the exempt market dealer unless any of the following apply:
(a) the individual has passed the Canadian Securities Course Exam;
(b) the individual has passed the Exempt Market Products Exam;
(c) the individual satisfies the conditions set out in section 3.11 [portfolio manager – advising representative].
Who are our Dealing Representatives? Check registration here: https://www.securities-administrators.ca/nrs/nrsFirmSearchResults.aspx?mode=QS&type=F&firm=stevloc+management+inc.
Your dealing representative must gather information about you in order to determine whether a potential investment is suitable for you. Your dealing representative is required to deal with you fairly, honestly and in good faith.
Please click HERE and one of our Dealing Representatives will reach out to you shortly
You and your dealing representative should start by having a comprehensive discussion about your personal circumstances, including your investment needs and objectives, financial situation, investment knowledge, experience, and risk tolerance. Your dealing representative can then offer you potential suitable investments, and explain how a proposed investment is suitable for you in light of the information you have provided.
EMDs must follow the same "Know Your Client" and "Know Your Product" procedures and carry the same "Suitability" obligations as other registered dealers (e.g. investment dealers, mutual fund dealers and scholarship plan dealers). These requirements ensure that each client's personal, financial and investment profile is understood and confirmed prior to any trading activity. EMDs must also ensure that any security they recommend is suitable for a particular client by considering the particular investment product as well as each individual client's investment goals and profile.
An Accredited investor is a person or entity that can deal with securities not registered with financial authorities by satisfying one of the requirements regarding income, net worth, asset size, governance status or professional experience.
Similar to an accredited investor, an Eligible investor must meet specific requirements based on net worth, income and suitability in order to invest in exempt market securities.
From NI 31-103, section 14.2:
In this section, “proprietary product” means a security of an issuer if one or more of the following apply:
(a) the issuer of the security is a connected issuer of the registered firm;
(b) the issuer of the security is a related issuer of the registered firm;
(c) the registered firm or an affiliate of the registered firm is the investment fund manager or portfolio manager of the issuer of the security.
The Directors & Officers of STEVLOC Management are also directors for King Capital Mortgage Investment Corporation and the Mortgage Manager for King Capital Mortgage Investment Corporation. Brandon Brot, a dealing representative with the Registrant, is also a director & officer for King Capital Mortgage Investment Corporation and the Mortgage Manager for King Capital Mortgage Investment Corporation. This relationship may make the Registrant, the Trust and the Manager “connected issuers” under applicable securities laws and investors should be aware of the potential conflict of interest.
Colleen Adams, an officer and director of STEVLOC Management Inc. is also a director of the Mortgage Manager for Royal Canadian Mortgage Investment Corporation. This relationship may make the Company a “connected issuer” under applicable securities laws; investors should be aware of the potential conflict of interest, as also described within the applicable.
Trevor Wolfe, an officer and director of the Registrant is also an officer and director of the respective General Partners of GSH Limited Partnership and KRS Limited Partnership. This relationship may make the Registrant, GSH Limited Partnership, KRS Limited Partnership (and the respective General Partners) “connected issuers” under applicable securities laws and investors should be aware of the potential conflict of interest.
Nick Simone, an officer, director and shareholder of Westway Capital Inc. is also an officer, director and shareholder of the Registrant. Indirect beneficial ownership to the GSH Lands and Building Project will be held by the GSH Partnership, Westway Capital Inc. and the Registrant, in their respective proportionate shares, being 40%, 10% and 5%, respectively. This relationship may make GSH Partnership, Westway Capital Inc. and the Registrant “connected issuers” under applicable securities laws and investors should be aware of the potential conflict of interest.
Indirect beneficial ownership to the KRS Lands and Building Project will be held by the KRS Partnership and the Registrant, in their respective proportionate shares, being 40% and 9.8%, respectively. This relationship may make KRS Partnership and the Registrant “connected issuers” under applicable securities laws and investors should be aware of the potential conflict of interest.
Liam Dougherty, a dealing representative with the Registrant is also an officer and director of 2558627 Ontario Inc., the Manager to Progressive Development Fund Trust. This relationship may make the Registrant, the Trust and the Manager “connected issuers” under applicable securities laws and investors should be aware of the potential conflict of interest.
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