Financially Responsible Marketing

Is the TSXV Still Relevant in 2015?

Posted by on Sep 23, 2015



I’ve been involved with the TSX since the 1970s. My first Capital Pool transaction was in 1997.


There’s been volatility in the perception of the TSX over that time. In the mid 70s, it was the world’s leader in trading consoles. In the 90s, havoc ensued when computer trading couldn’t keep pace with volume.

But every time there were problems, the exchanges bounced back and moved forward. Even the out-of-control mining markets have been brought in line; it’s no longer the Wild West.

The merge of the Alberta Stock Exchange and the Vancouver Stock Exchange, and the subsequent creation of the CPC platform on a more national basis, marked a turning point in Canadian stock markets. The cost-effective go-public opportunity it created was unique. It still is, worldwide.

Today we keep hearing that the Venture is irrelevant, not providing opportunity. It’s said that the Venture is removing capital from the markets. And that it is only useful for mining issuers that have been shut out of the markets for years now. I’m amazed at the coverage the naysayers receive. It is upsetting at best, and it certainly isn’t correct.

The response should be … nonsense! The Venture and the CPC program continue to function as designed. Repeatedly and cost-effectively, they provide entrepreneurs with the ability to access capital and go public.

Is every issue successful? Of course not, but neither are the IPOs that debut on the NYSE. There is no such thing as perfection in the capital markets (can you say Global Crossing?).

Non-Canadian companies have recognized the unique opportunity presented. They’re using the CPC as a way to go public and raise ongoing funds.  Last year alone, we saw Patient Home Monitoring, Convolo, and Insperia take this route.

The US has the Pink Sheets. There, by contrast, almost 30,000 companies trade in relative obscurity. Live market quotes are unavailable; manipulation is all too easy.

Whenever I hear someone say “We should do away with the Venture,” it’s all too obvious to me that they have never traded in the U.S. Earlier in my career, while trading from the other side of the border, I would try to get a market by phone from at least three market-makers, to provide some level of fairness to the client. Back then, those trades had fixed commissions and the time could be justified. Now, the cost-effectiveness is gone.

The amount of capital raised since CPCs were created is remarkable. Many, many companies have migrated to the big board successfully. Trading volume is not a problem – take a look at PHM in the last year!

Is everything perfect? No.

And it never will be on any exchange. Technology moves much faster than rules can be rewritten, worldwide. Dare I say that if the naysayers spent equal time and effort making thoughtful suggestions as they do holding forth from a position of listen-to-me narcissism, Canada could continue leading the world in access to capital for small and growing companies…