Capital Markets. Executed with Discipline.

The exempt market is the private capital market in which securities are distributed without a prospectus under exemptions provided by Canadian securities laws.

Many private companies, investment funds, real estate investment trusts, and Mortgage Investment Corporations raise capital through the exempt market because preparing a full public prospectus is often unnecessary or impractical for private offerings.

The exempt market is governed primarily by provincial securities legislation together with National Instrument 45-106, Prospectus Exemptions.

A prospectus is a comprehensive disclosure document that must generally be prepared and receipted by the applicable securities regulator before securities may be offered to the public.

Preparing a prospectus is a significant legal, accounting, and regulatory undertaking and is typically associated with public offerings of securities.

Canadian securities laws recognize that certain private offerings may proceed without a prospectus where specific statutory exemptions apply. These are known as prospectus exemptions.

A prospectus exemption allows securities to be distributed without filing a prospectus where the conditions of the applicable exemption are satisfied.

Common prospectus exemptions include:

• Accredited Investor
• Offering Memorandum
• Family, Friends and Business Associates
• Minimum Amount Investment
• Other exemptions available under National Instrument 45-106 and applicable securities legislation

The availability of a particular exemption depends on the issuer, the investor, and the nature of the transaction.

An Exempt Market Dealer (EMD) is a person or company registered under National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations, to trade securities distributed under prospectus exemptions.

Registered dealers are subject to ongoing regulatory obligations, including:

• Know Your Client (KYC)
• Know Your Product (KYP)
• Suitability assessments
• Conflict of interest management
• Supervision of registered individuals
• Recordkeeping and regulatory reporting
• Compliance systems and internal controls

These obligations are intended to promote investor protection and the integrity of Canada’s private capital markets.

Startly acts as the registered dealer responsible for conducting exempt market distributions in accordance with applicable securities laws. Depending on the distribution model, Startly may:

• distribute securities through its registered Dealing Representatives;
• provide dealer supervision and compliance oversight for investment managers conducting ongoing exempt market distributions; or
• sponsor and supervise eligible Dealing Representatives working with established investment managers.

In every case, Startly conducts its registered activities through documented compliance procedures and ongoing supervisory oversight.

Investments are available only to eligible investors who satisfy the requirements of applicable Canadian securities laws and our internal onboarding and suitability procedures. Startly currently accepts eligible investors resident in:

• Ontario
• British Columbia
• Alberta

All prospective investors complete identity verification, KYC information, suitability assessments, and subscription documentation before an investment is accepted.

Startly provides an established registered dealer platform for investment managers conducting ongoing exempt market distributions. Our services include:

• Registered dealer oversight
• Issuer onboarding and product review
• Investor onboarding
• KYC, KYP, and suitability supervision
• Dealing Representative sponsorship and supervision
• Compliance monitoring
• Regulatory reporting
• Recordkeeping
• Audit and compliance review support

Our platform is designed for established investment managers operating recurring capital raising programs.

Eligible investors may establish an account through our secure online investor portal. As part of the onboarding process, investors complete identity verification, KYC information, suitability assessments, and subscription documentation in accordance with applicable securities laws before investing in eligible offerings.

Startly works with established investment managers seeking an experienced registered dealer to support ongoing exempt market distributions.

If you operate an established evergreen investment fund, private REIT, Mortgage Investment Corporation, or other private investment vehicle and would like to discuss our dealer platform, please contact us to arrange an introductory meeting.