At times, we can all be critics or nay-sayers. This is not the time. It has been a great year, and there is palpable excitement about the OM exception coming to Ontario on January 13, 2016, opening up a retail exempt market there. This is a significant change in the Canadian capital markets, and will help democratize investing and give firms wider access to capital raising. You can read Craig Skauge’s fascinating Q&A or our insightfully written Ontario series of articles in this issue for further elaboration on this positive change.
More importantly, these changes have a bigger significance as when other areas of financial services (excluding banks) are retracting in the face of policy changes and attacks on compensation, the exempt market is flourishing and is gaining noticeable momentum. The exempt market is gaining support and enthusiasm from Financial Advisors that want to offer their clients more than investment Pablum including deflated bonds and the volatility of the stock market.
NEMA put in three years of proactive work advocating for this change. In short, it was a grind, as regulation change does not come easily. NEMA was like the ‘little engine that could’ perilously going up a rocky mountain against current mainstream wisdom to fight for policy change. Most people said this change would never happen. Luckily, they were wrong. It did not happen overnight and it was not easy (especially when they pushed back last spring with the limits proposal), but is was certainly worthwhile. All NEMA members should be proud of the contributions they made to this fight, including the comment letters, which facilitated this important victory.
In the upcoming year, will we continue to be vigilant on policy issues. This includes important announcements of the co-operative regulator, and how our market is to be treated, ensuring the exempt market does not fall through the cracks of the legislation. Application of suitability tests, attacks on compensation schemes and trailer fees in other registration categories are also a concern.
Now that we have the ground work set up, and have had five years of the new exempt market under NI 31-103 it is time to switch gears as we get the opportunity to be less reactionary and more proactive in our space and with our work.
NEMA is excited to help further build out the new exempt market with the support of our talented members. An association is nothing without members, and this is the year we want to highlight members for their talents and contributions to capital raising while giving novel options to investors. Our members are best in class in the exempt market, and have many interesting stories that we hope to highlight in this magazine in the upcoming issues.
We love hearing from our members. After all, NEMA is the voice of the exempt market. From NEMA, we wish you a happy holiday and a prosperous new year. Thank you again for contributing your time, focus, and talents to our cause.
Cora Pettipas CFP, CIM, FCSI, MSc. is currently the Vice President and a Board of Director of the National Exempt Market Association (NEMA) in Canada. Cora is also the editor of Exempt Edge Magazine, the Canadian industry trade publication on the exempt market/private equity. She is also currently representing Canada on the Body of Knowledge Committee for international education initiatives for the Financial Planners Standards Board and is a policy ambassador for the Financial Planners Standards Council. Cora has had tenures with several financial institutions in the capacity of financial advisor, wealth management, and financial planning. Her most recent previous position was as a Professor at Mount Royal University, where she taught Finance and Financial Planning. Cora holds a Bachelor’s degree from McGill University, a Master’s Degree (Finance and Controlling) from Swiss Management Center University and is currently a Ph.D. candidate in Finance there as well.