Wealth Up Investments | Your Exempt Market Specialists
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Are Exempt Market Products risky?


All investments come with some degree of risk and the Exempt Market is no different. The various provincial securities commissions consider this market high risk for many reasons but primarily because of it’s lack of liquidity.  This means that there is no secondary market to sell your securities so it is very difficult to liquidate before the investment is complete. In other words, if you invest for a 3-year term, you likely would not be able to redeem until that time and there's also the possibility of an investment taking longer than planned. In a higher risk market, there is also a greater possibility of losing some or all of your money. 

Fortunately, as of 2010, Exempt Market Dealers now dominate the private capital markets in Canada and they have taken large steps to reduce the risks for investors through their due diligence process.

The Exempt Market in Canada raises billions of dollars every year. There are numerous issuers that strive to enter the market to raise capital for their projects, all with varying levels of experience and track records. This is where due diligence is KEY in this marketplace to ensure that investors can choose from quality issuers that have proven experience and a history of delivering on their funds or projects.

WealthUp Investments is licensed with WhiteHaven Securities Inc. - an Exempt Market Dealer. WhiteHaven Securities does due diligence on all of the Exempt Market products that are offered to our clients and here are some things they look at during the process:

  • When an EMD is just considering an issuer to raise capital for, they can do a preliminary review and report. Based on this report they can decide if they want to take the diligence to the next level or if they want to refuse the issuer.

  • If they decide to take it to the next level, they will complete a full diligence package which would include (but is not limited to) items like:

    • Corporate structure and governance

    • Financial analysis

    • Market assessment

    • Competition analysis

    • Management team and experience

Based on these findings, WhiteHaven Securities will decide if this is a quality product and potentially approve the issuer.  Following that, a Dealing Representative can offer the investment to clients.

BUT, even with all of this research and extensive diligence, there is never a guarantee. Every step possible is taken to mitigate the risks but as with investing overall, there is always the possibility you could lose money.

And to leave you on a positive note… with top quality issuers, extensive diligence, annual updates and full transparency, there is also an excellent chance that you will achieve the higher returns that are offered.