Richard Carleton, CEO of CSE – Canadian Securities Exchange recently spoke with Proactive Investors and discussed the recent rebranding from CNSX to CSE, the advantages of listing on the exchange, and touched on the specific reasons why Ned Goodman and Tom Caldwell are active investors in the company.
CSE Chairman Thomas Caldwell went One-on-One with Andrew McCreath on his weekly BNN program to discuss regulation and the markets and most pressingly addressed the question: Is too much regulation hurting the securities industry?
Tom, a vocal advocate of improving securities regulation in Canada, lent his thoughts on the current state of “over regulation” in the Canadian securities industry, exemplified by his early comments in the interview :
“I think we’ve reached a tipping point where the volume, the mass of regulation is so great – and a lot of it is not substantive in protecting investors – but the volume is representing a massive cost, not only to independent brokerage firms, but also to companies raising money – ergo it’s impacting the economy.”
Tom then touches on the spiralling growth of regulation as illustrated by this point:
“Take a look at the Ontario Securities Act – a year ago it was 2800 pages, this year it’s 3500 pages. it’s been expanding at 20% a year.”
One issue he is particularly concerned about is the upcoming Client Relationship Model, which could have dire consequences on transactional brokers that invest in junior companies:
“Brokers will no longer recommend junior or new companies to investors. The risk is too high for the broker – it’s going to hurt that industry big time.”
From a securities firm perspective, the increasing growth of regulation is making the business model of running a brokerage unsustainable:
“The costs of regulation are now the killer… typically one third to one half of all your administrative costs relate to regulation, that is an unsustainable business model.”
Ultimately, Tom offers his thesis on where the industry needs to look to improve, for the betterment of the economy:
“I think we should take a look at securities regulation and see how we can make it better – better being simpler… because in securities regulation less is more, simpler is better. Because it is easier to police and it is easier to focus on from the broker to comply.”
Not dismissing the importance of regulation (it is very important), Tom makes the telling statement about how growth in regulation can be misinterpreted as a positive by saying:
“Sarbanes-Oxley never saved one investor one dollar!”
The second portion of Tom’s interview focuses on his market outlook.
Some quick insights from the second portion of his interview with Andrew:
In October of 2013, the British Columbia Securities Commission (BCSC) held its annual Capital Ideas Conference with a particular focus on mining and venture capital markets. A broad variety of topics were discussed such as raising capital, high frequency trading, retail investor participation. The BCSC has put together a selection of videos of the panel discussion which is worthwhile to check out.
While it is intuitively simple, the impact of an entire economic sector losing altitude is jarring to the people and stakeholders within it. In addition to the companies themselves, the broker dealers, financiers and even the exchanges have been impacted by the downturn in the sector.
This conference was an interesting forum for two key reasons. First, it allowed participants to confront the reality of adapting to new models of doing business. Second, and more importantly, it enabled stakeholders to think about the future of the marketplace and to challenge the existing ways of operating in the capital markets that don’t fit the current cycle for many junior mining and exploration companies.
A topic the CSE is particularly passionate about addressing is the current state of raising capital faced by many junior companies. During a portion of the panel discussion that focused on the challenges facing public companies, CSE CEO Richard Carleton was invited to provide his thoughts on the subject.
According to Richard, despite the many challenges facing the industry, there are opportunities for positive change.
Some of the improvements to the marketplace he mentioned included:
Check out the following video to hear Richards remarks on the possible opportunities to improve the marketplace for multiple participants.
Proactive Investors recently profiled one of CSE’s newest listings – Urbana Corporation – a closed-end investment company (CSE:URB and CSE:URB.A). The company’s Chairman, Thomas Caldwell is also the Chairman of CSE – Canadian Securities Exchange. In the article much is discussed around the reasons for co-listing URB shares on CSE. Other highlights from the article include:
CSE recently consolidated its trading venues (CNSX and Pure) for the CSE rebranding. You can read about this “Project One” initiative here.
This initiative introduces efficiencies and cost savings for our clients and most importantly, for the dealers that connect to our marketplace.
To clarify – CSE now trades both CSE-listed securities (like Gener8, CSE:GNR) as well as other Canadian listed securities all on one platform. Please note that CSE-listed securities do have slightly different trading hours in comparison to other Canadian securities trading on CSE. Here is a breakdown:
CSE listed market (formerly CNSX):
Hours are from 9:30-4pm. Pre-open is 7am. No after-hours trading.
CSE other listed market (formerly PURE):
Hours are from 8-5pm. Pre-open is at 7am. No after-hours trading.
Consequently, the CSE is Canada’s busiest venue for trading after 8am and is the preferred destination for early morning trading activity.
Bird. Meet worm.
Richard talks to Shelly Kraft and provides an overview of the exchange, its unique listing model, and touches on the topic of US retail market access to CSE.
In fact, CSE is the only Canadian exchange to offer real time data on Google Finance. Other exchanges that supply real time data to Google include Nasdaq, the NYSE, the London Stock Exchange and Euronext.
Visit Google Finance today and start researching your favourite CSE stocks using real time data!
One common question we receive at the Exchange is “where can investors trade CSE stocks in Germany?”
We are happy to report that ING clients in Germany are able to trade via ING DiBa: https://www.ing-diba.de/
Want more information on how to trade CSE stocks online? Visit our retail trading centre here: http://www.sparxtrading.com/stock-exchange-profile-canadian-securities-exchange-cse/