Exempt Market Dealer (EMD): A CSA-registered dealer category under NI 31-103 that distributes securities under prospectus exemption. Not regulated by CIRO.

Exempt Market Dealer (EMD)

A CSA-registered dealer category under NI 31-103 that distributes securities under prospectus exemption. Not regulated by CIRO.

Definition

An Exempt Market Dealer is a registered dealer category under NI 31-103 §7.1 that is permitted to trade in securities sold under a prospectus exemption (private placements, accredited investor offerings, $150,000 minimum-amount offerings, and offering memoranda). EMDs are registered directly with the CSA member jurisdictions (OSC, AMF, BCSC, ASC, etc.) and are not under the jurisdiction of CIRO. Common EMD products include private REITs, MICs, oil and gas LPs, private debt, and exempt-market hedge funds. Proficiency requirements for EMD dealing representatives are set out in NI 31-103 §3.10 and accept the CSC, the Exempt Market Products Exam (EMPE), and certain other equivalents. Because EMDs sit outside the CIRO Proficiency Model, the January 1, 2026 CSC retirement did not apply to them; the CSC remains a recognized credential for new EMD registrations. Registrants in EMD roles still owe KYC, KYP, and suitability obligations under NI 31-103 §13.2 to §13.3 and the CSA's Client Focused Reforms (CFR), even though they are not subject to CIRO IDPC Rules.

Source

NI 31-103 §3.10 (proficiency), §7.1 (registration), §13.2-§13.3 (KYC/KYP); CSA companion policy 31-103CP

Where this shows up on the CIRE

Outcome 1.3

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1
A provincial securities commission issues a temporary cease-trade order against a public company's shares. A CIRO dealer member continues to accept client buy orders in those shares on the basis that CIRO rules do not expressly prohibit the trades. Which of the following best describes the firm's position?
Outcome 1.3 · click for answer
A.The firm is correct because a temporary order has no force until a hearing confirms it
B.The firm is wrong: provincial orders bind all participants there, and CIRO rules never override themCorrect
C.The firm is correct because CIRO rules govern dealer members and sit above provincial securities orders
D.The firm is correct because the order restrains only the issuer and its insiders, not dealer members
The Canadian securities regulatory framework is built on a cooperative structure in which CIRO rules sit alongside, not above, provincial and territorial securities legislation. A cease-trade order issued by a provincial commission binds all market participants within that jurisdiction, including dealer members and their clients. The absence of a specific CIRO rule repeating the prohibition does not create an exemption.
2
A foreign national wishes to act as a registered representative in Canada. Which regulatory body is primarily responsible for approving the individual's registration?
Outcome 1.3 · click for answer
A.CIRO, since it is the national SRO with sole authority over investment dealer approvals
B.The Bank of Canada, since it sets the monetary policy rules behind registration standards
C.OSFI, since it supervises financial institutions and the employees they license
D.The provincial or territorial regulator, alongside CIRO's co-regulatory approval roleCorrect
Registration of individuals in the investment industry is governed by NI 31-103, which is adopted by each provincial and territorial securities regulator. CIRO exercises a co-regulatory role through its Approved Person process; an individual must be both registered with the applicable securities regulator and approved by CIRO before acting as a registered representative at a CIRO dealer member. OSFI regulates federally chartered financial institutions but not individual registrations, and the Bank of Canada sets monetary policy rather than registration requirements.

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