The history of exempt markets contains some cautionary tales, but also shows how the Exempt Markets are now poised to succeed. While the average investor may not be aware of it, the exempt market has existed for years. In the past, most people knew of the exempt market as the "alternative" or "private" market. Exempt Markets were largely tools that large investors used to create wealth, and because the exempt markets did not go through the traditional capital markets, most people assumed that the average investor would not be interested in investing.
However, in the mid 2000's, the Exempt Market was opened up to retail level investing. Lots of companies arrived to take advantage of the new offerings, and many people invested their money without realizing that the Exempt Markets were not held to the same standard that the traditional markets were held to, and as a result, in 2009 the federal government stepped in and created a formal process for those who wish to sell Exempt Market products. Sellers must now pass the Exempt Market Product Exam, or have completed the Canadian Securities Course. They must also be licensed, and be registered with an Exempt Market Dealer, creating a level of responsibility that did not exist before. While the Exempt Markets may be a source of alternative funding, it is not completely unregulated.