March 30th, 2017

Job opportunities in the exempt market

If you’re looking for job opportunities in the financial services industry, you may want to consider the lesser-known exempt market.

Generally, the exempt market facilitates a cost-effective method for smaller or early-stage businesses to raise capital. Products are sold through subscription, similar to an insurance product. There’s no daily trading or secondary market as you would find in the public market, and products sold in the exempt market don’t have market values (unlike stocks, bonds, etc.). This equates to a lack of liquidity and clients may be required to hold these investments for a specified period of time before they can access their money.

The exempt market is more specialized than the public market, and exempt market clients tend to be wealthier and more sophisticated. If you’re interested in working in this market, here’s what you’ll need to know.

Who operates in the exempt market?

Organizations in this space typically fall into the following categories: exempt market dealer, issuer, or service providers.

  • Exempt market dealers (EMDs) are registered with the regulators to distribute exempt market securities. EMDs can be either proprietary or third-party dealers. Proprietary dealers only sell their own products whereas third-party dealers (or brokers) are able to sell products from a variety of issuers.
  • Issuers are product manufacturers that build the exempt market investments. There are many types of product structures and issuers in Canada but some common offerings include real estate investment trusts (REITs), mortgage investment corporations (MICs), and private investment funds. If issuers are registered as exempt market dealers, then they are proprietary dealers as discussed above.
  • Service providers are firms that provide services to participants in the industry. They can include legal, accounting, marketing and software firms.

What opportunities exist?

Any of these firms may have job opportunities. However, dealing representative is the most common role available in the exempt market.

Dealing representatives work as advisors for exempt market dealers. They recommend and sell exempt market securities to investors. Their role is typically entrepreneurial and commission-based.

What skills can help?

Many professionals who work in the exempt market have financial or legal backgrounds. Dealing representatives quite often gain experience as advisors in other registrant categories, such as mutual funds or investment dealer, before entering the complex exempt market. Many also have backgrounds from related industries such as insurance or mortgage brokerage.

From an educational standpoint, the Exempt Market Proficiency Course is an important first step for anyone entering the industry.

How to get started

Talk to other people who work in the exempt market. Contact the industry associations: National Exempt Market Association and the Private Capital Markets Association of Canada. Look for professionals who are doing the type of work you want to do and contact them. If they’re open to discussing their roles, ask about their skills, background, how they got started and any advice they may have for you.

You could also attend industry events, where you’ll meet and have a chance to speak to people about the many opportunities available in the exempt market.

Are you ready to explore IFSE courses related to exempt markets? Consider these:

IFSE wishes to extend special thanks to Cora Pettipas, President of the National Exempt Market Association (NEMA) for her contribution to this article.