CSE Performance

Canadian Securities Exchange CEO Richard Carleton’s Year-End 2024 Interview

One of the reasons financial markets never lose their vast audience is that they constantly evolve. Whether the change makes investors happy or not, there is always something new taking place, and one day is never the same as the next. It is a dynamic that was on full display once again in 2024.

Large-cap stocks remained strong, with broader indices setting dozens of daily closing records. And while not fully keeping pace, small-cap stocks finally caught a break in 2024, with those in the Canadian market benefiting from several months during which it seemed like gold was reaching a new all-time high every day. Retail trading staged a resurgence in the second half of the year, and institutional investors returning to the Canadian junior market became a frequent topic of conversation.

The Canadian Securities Exchange continued its evolution as well, and in May, celebrated its many successes over the 20 years since it became recognized as a stock exchange by the Ontario Securities Commission. The Exchange also undertook policy and other adjustments to business lines, joined an important global organization for exchanges, and went into the end of the year positioned to take advantage of renewed interest in cryptocurrencies and other digital assets.

With 2025 just around the corner, Richard Carleton, CEO of the CSE, shares his thoughts on Canadian market performance during 2024, the outlook for the year ahead, and previews important new initiatives that issuers and investors will surely want to watch.

In 2024, the CSE celebrated its 20th year as a recognized exchange. Issuers raised more than $26 billion in capital over the course of those two decades, and the CSE became one of the fastest-growing exchanges in the world. What does this milestone mean to you and to the broader CSE team, many of whom have been with the Exchange for a large part of their careers?

Our team takes a lot of pride in the success that the organization has experienced, and particularly in the last 10 to 12 years. It’s fair to say that the first 10 years were quite challenging, as we fought to become a meaningful part of the Canadian capital markets.

We are extremely pleased, not just with the achievements of the organization itself but those of CSE issuers as well. Companies have raised more than $26 billion through the facilities of the CSE, and being part of that means we have helped to foster the creation of new industries in Canada, the United States, and beyond.

The CSE has been part of several key investment themes over the last 10 to 15 years, whether it was the development of the cannabis industry in Canada and the U.S., or as is the case in the current market, the mining industry. The mining industry is vibrant, both in the so-called battery metals sector, which hopes to provide the needed materials to support the decarbonization of the economy as well as the precious metals group, which is riding the wave of record highs in the price of gold this year.

We’re very happy that we have made it this far, but our work isn’t done by a long shot. We look forward to continuing to help Canadian entrepreneurs, and entrepreneurs from around the world, tap into the Canadian public capital markets.

In June, the CSE announced that it had been recognized by the World Federation of Exchanges (WFE), the world’s foremost group for exchanges and clearing houses. What benefits do you anticipate membership will bring?

I’m actually just back from the annual meeting and general sessions of the World Federation of Exchanges in Kuala Lumpur, Malaysia, so I’ve had a chance to witness the organization operating first-hand.

Our move to join the WFE reflects the reality that a lot of our issuers are looking beyond Canada for capital. We see issuers going to the United States, the U.K., Europe, Australia, and South Asia for money. Raising money locally is a challenge in Canada.

As our issuers look beyond Canada, we need to be out there ahead of them to explain to local investors and investment funds that we are part of the Canadian capital markets framework, and one of the aspects of that is undergoing the process we did to become a member of the World Federation of Exchanges.

Our policies, procedures, and rules were vetted by three exchanges: the Warsaw Stock Exchange, B3 in Brazil, and the Johannesburg Stock Exchange, to ensure that we meet global standards for issuer regulation and investor protection. That provides overseas investors looking to trade or invest in companies listed on the CSE the assurance that we meet the standard that the WFE represents.

CSE issuers have been noticeably more active raising capital in 2024. Which industry sectors led the way, and have investors shifted priority with regard to the sectors they are most interested in?

As I mentioned before, the mining industry, and in particular precious metals exploration companies, have been the leaders in terms of the number of financings completed. They tend to be on the smaller side because the needs of early-stage exploration companies are certainly not the same as companies looking to do significant expansions, so they are not looking for hundreds of millions of dollars at one time.

We have also seen some interest in companies that have integrated artificial intelligence solutions into their product offerings. Of course, with the increase in the price of a number of cryptocurrencies over the last six to 12 months, a lot more interest has come back into the blockchain and crypto space.

The big numbers continue to come out of the cannabis sector, but in terms of the number of financings completed, it is the mining exploration group that is leading the way at this point.

Many market participants believe the second half of 2024 provided a more encouraging operating environment for smaller Canadian public companies than the first half. What were the factors behind this and how did they influence the broader operating environment for issuers and for the CSE itself?

I would say that it was the first three quarters that really weren’t very good, from either a trading or capital formation perspective. And I think it is fair to say – and I am not being controversial in any way – that the federal government’s approach to capital gains inclusion was a significant negative for companies looking to raise capital in Canada. I mentioned earlier that we are seeing our companies go out from Canada more and very much looking to the United States, in particular, for capital.

I don’t think there is any doubt that the decrease in interest rates beginning earlier this year helped fuel both the opportunity for companies to raise capital as well as secondary market trading activity. We were at a very low ebb for the first three quarters of the year, but recently there has been about a 50% jump in trading activity across Canada, and certainly, the CSE has more than done its part in contributing to this increase in activity. The interest rate picture is one aspect of it, and the volatility we have seen in the marketplace around the U.S. election and since has been a factor.

I hope it is sustainable into the new year, as it tends to be a leading indicator of more activity on the listings and capital formation front. As entrepreneurs see more trading activity, and thus more interest in the junior capital markets, they, and investors, are far more likely to support new companies coming into the market.

The CSE’s trading and data operations are closely related but also can be viewed as separate business lines. How has each performed in 2024?

People often ask about the relationships between the different business lines at the Canadian Securities Exchange, or any stock exchange. First and foremost, it begins with the issuers. If you don’t have interesting companies that are making progress toward achieving their goals, it is unlikely that people are going to trade the stocks or be interested in the market data related to those companies. So, where it really starts is having a group of companies that investors in Canada and beyond are interested in owning.

With that, as I mentioned earlier, trading levels on the CSE and other Canadian markets have been very low, and I mean levels that we have not seen since 2013 and 2014. It was a very challenging environment.

During that time, we made some changes to our market data policies. Effectively, we have increased some prices for the first time since 2016 in the market data segment. It was a significant bright spot for the results of the organization over the course of the year, and in fact, as the team worked to implement the new pricing and policies around connectivity and access to some of the Exchange’s services, we identified additional customers. As a result, the performance of the market data business has been very strong in 2024.

The CSE welcomed Rektron Group as its second senior-tier issuer in 2024. What has the overall pace of new listings been? And how does the CSE’s new listings activity rank within the broader Canadian exchange landscape?

The pace of new listings has been quite slow. In fact, not since back into the earlier teen years of this century have we seen such low levels of activity. It has picked up somewhat but delistings over the course of the year exceeded the number of new issuers we welcomed. Unfortunately, we are in a position in the business cycle where the overall number of companies listed on the Exchange at the end of the year will be smaller than what we started with.

That said, we have seen a pickup in activity, particularly since September. Over the last two quarters, we have been listing about half of the companies coming to market in Canada, which is close to historic norms. Perhaps we did a little better in 2022, and particularly in 2021. But, as I say, I am encouraged that we are seeing an increase in the number of companies coming in, and more importantly, an increase in the number of applications that our team is receiving, indicating that we should see a little bit of strength in the new year.

It is clear from CSE press releases that the Exchange’s team has been on the road quite a bit in 2024, attending conferences and meeting foreign executives and industry leaders. The United States seems to be a particular focus. Can you discuss the strategy for international outreach at the CSE?

One of the things people need to appreciate is that a Canadian reporting issuer can access the same prospectus-exempt capital formation techniques that a U.S. reporting issuer can use in the United States. What that means is that without becoming a company that is a reporting issuer with the SEC or listing on Nasdaq or the New York Stock Exchange, you can actually do private placements in the U.S. with U.S. investors using only your Canadian Securities Exchange listing. And the same is true for the other Canadian exchanges.

Given that the U.S. is the largest capital market in the world by a substantial margin – I believe the number is currently something like 62% of the world’s equity market capitalization – it means companies listed on the CSE have a tremendous opportunity to raise money in the U.S. without the significant additional cost that would be undertaken if they were to list on one of the national market system exchanges there.

That has definitely become a real focus for us. As I say, things have been a little tough in Canada over the past year and a half, whereas the U.S. markets have been significantly more robust. There is more risk capital available in the U.S. for entrepreneurs as well. U.S. investors are very interested in the battery metals and the energy metals, and they have been supporting that investment theme for the last two or three years.

But our companies have also gone further offshore. For example, companies in the gold exploration sector, in particular, have always attracted a strong following from Germany and Switzerland. We see our issuers going there for capital formation, as well as to engage in investor relations roadshows and other activities. Many also ensure that their website and continuous disclosure materials are available in the German language.

So, again, that means that we have to be there making sure that local investors understand who the Canadian Securities Exchange is, that we are a material and meaningful part of the Canadian exchange landscape, and that they are not assuming additional risk by investing in a CSE company versus one that is listed on another Canadian exchange.

Bitcoin’s price is near a record high as we head into the end of the year. Does this signal anything about the potential for change in how capital markets operate? Are there businesses that the financial community should be taking a closer look at?

That’s an interesting question because it appears that Bitcoin and other cryptocurrencies are here to stay. And what we increasingly are seeing is those markets being pushed by the regulators in many respects to use the framework and structures that are familiar to those of us in the equity world. So, whether that is the idea that participants in these markets should be members of self-regulatory organizations like the Canadian Investment Regulatory Organization (CIRO) in Canada or that the instruments themselves should be considered securities and the distribution of those securities be done in accordance with the existing securities legal framework, there is an understanding that as these instruments become more mainstream, the traditional finance infrastructure is going to take care of a lot of the concerns people have had about participating in those markets.

It may not mean that they are listed on an exchange, but certainly that there is organized clearing and settlement and that there are regulated parties working in the space in an attempt to reduce some of the criminal aspects that we have seen with some of the companies involved in the crypto space.

As time goes on, it is likely we will see more use of tokenization or digitization of securities and utilization of some of the technologies fundamental to cryptocurrencies to facilitate clearing, settlement, and other processes underlying securities trading in North America.

It has taken a little longer than I thought it would – we were talking about this four or five years ago – but my sense is that progress continues. I think we will see some interesting initiatives in 2025.

In August, the CSE announced approval to introduce a market-on-close (MOC) facility designed to concentrate liquidity, reduce volatility, and enhance execution sizes at the close of trade each day. It comes in reaction to increasing fragmentation of trading activity across a growing number of execution venues. Can you talk about the MOC framework and its importance?

The market-on-close framework is complicated and I don’t expect people to go into the nuts and bolts of how it operates. Basically, the reason we are launching a market-on-close facility is to ensure that entities managing certain types of products, particularly exchange-traded products such as ETFs with CSE companies in them, have the opportunity to manage them in a way that ensures the tightest tracking of their portfolio to the underlying cash market.

This is a critical piece of infrastructure that we need to have in place for the CSE to both have ETFs listed on the Exchange and to make sure that our issuers have the opportunity to be in more ETFs, whether they are listed on the CSE or elsewhere. That is really the motivation – to support our move in 2025 into the ETF listing space.

What other plans does the CSE have for 2025? Can the financial community expect anything else new or different next year in the CSE marketplace and how the Exchange operates?

I’ve telegraphed that we expect ETFs containing CSE issuers to list on the Exchange at some point over the course of 2025. We think it is a great initiative because it will improve liquidity for component companies and increase the visibility of those companies as manufacturers of the ETFs market them to investors. We think there will be real interest from our issuers in wanting to be part of those ETF products, and we will be partnering with a variety of entities to bring them to market. So, this is certainly a big development that investors can anticipate next year.

We are looking to make some further adjustments to our pricing on the trading side with a view to ensure we can cut trading costs for the dealer community as much as possible, while promoting liquidity for companies listed on the Exchange or other-market securities that also trade on the CSE. We made some minor adjustments in October that led to a doubling of market activity in TSX and TSX-Venture stocks traded on the CSE. We think there is more to come in that direction as well.

And while I think it might be premature to go into detail, the Exchange has made some outside investments over the last few years. We are particularly interested in Tetra Trust, which is Canada’s first and leading custodian for digital assets. At this point, it is providing custody services for a number of Canadian and international financial institutions in Bitcoin, Ethereum, and other cryptocurrencies.

We believe there are more services that Tetra Trust can provide to support the continued development of digital assets, in particular, to make access to trading services for those instruments more widely available to retail accounts, particularly through the traditional brokerage community. I think we will see some interesting developments in that regard next year.

CSE Performance

2024 Year-End Rewind

January Highlights

To wrap up an incredible year, we’re sharing our favourite highlights from each month. For our first post, we’re looking all the way back to January, when Richard Carleton, CEO of the CSE, shared an important message on our blog, the CSE team attended a number of renowned events, and we released our first podcast of the year.

The “Senior” Exchange and Other Capital Market Myths Blog

In today’s challenging market, when market participants need a clear understanding of available choices, inaccurate storytelling sows unnecessary confusion.

As we entered 2024, Richard Carleton shared a special blog post, “The ‘Senior’ Exchange and Other Capital Market Myths,” to help bring clarity and dispel myths surrounding Canadian stock exchanges.

The blog post debunks “senior” exchanges, provides insight into securities laws and investing in CSE issuers, and highlights the unique qualities that set the CSE apart.

Read Now: The “Senior” Exchange and Other Capital Market Myths

VRIC 2024

On January 21-22, the Vancouver Resource Investment Conference (VRIC), presented by Jay Martin, President and CEO of Cambridge House International, made its exciting return.

The CSE was pleased to connect with friends old and new in the mining and exploration space at this action-packed event, filled with keynotes from over 100 expert speakers, a tradeshow and exhibition, extensive networking sessions, and more.

The renowned event also served as a platform for sharing our unique expertise via two CSE-hosted panels, moderated by the CSE’s Anna Serin, Director of Listings Development for Western Canada and U.S. & Vancouver Branch Lead.

The first panel, “Beyond Borders: Navigating Cross-Border Capital and Liquidity Opportunities in Resource Companies,” featured the CSE’s Richard Carleton, CEO, and Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group.

The second panel, “Powering Tomorrow: Taking Stock of Global Lithium Supply in the Energy Revolution,” featured Jason Barnard, President and CEO of Foremost Clean Energy (CSE:FAT), and Scott Eldridge, CEO of United Lithium (CSE:ULTH).

Several CSE listed issuers also attended the event, including:

The CSE’s Renowned Mining Over Canada Reception

Back by popular demand, the CSE’s annual post-VRIC Mining Over Canada Reception was even bigger and better than ever.

Held at the prestigious Vancouver Club, the Canadiana-themed networking event brought together CSE listed issuers and members of the capital markets and mining communities for an evening filled with great live music, conversation, and outstanding food and drinks. 

The event was a resounding success thanks to our generous event sponsors, MNP, Odyssey Trust Company, Haywood Securities, Morton Law LLP, and Grove Corporate Services.

We hope you enjoy these photo highlights.

View the Album: Mining Over Canada 2024

The JSE 19th Regional Investments & Capital Market Conference

The CSE team enjoyed a productive break from the winter weather at the JSE 19th Regional Investments & Capital Market Conference on January 23–25 at Jamaica Pegasus Hotel in Kingston, Jamaica. 

We were pleased to sponsor this three-day premier event, hosted by the Jamaica Stock Exchange, which brought together financial services industry players from around the world to examine and strategize on the sector’s most pressing topics and global trends.

The CSE’s Rob Cook, Senior Vice President of Market Development, enjoyed catching up with entrepreneurs, members of the capital markets, and our friends at the Jamaica Stock Exchange during this wonderful event.

Gwen Preston on The Exchange for Entrepreneurs Podcast

The Exchange for Entrepreneurs Podcast returned for a brand-new season this January.

In the inaugural episode, the CSE’s Anna Serin served as host for a special interview with Gwen Preston, Newsletter Writer and Mining News Blogger at Resource Maven, to discuss the mineral exploration and investment space.

Gwen Preston shared insights on what happened in the resources market in 2023; factors shaping current trends in the mining and exploration sector, including rate hikes, competition for speculative capital, and the impact of electrification; and her predictions for gold, uranium, and more.

Watch Now: Gwen Preston on Resource Trends for 2024

February Highlights

Despite being the shortest month of the year, we launched the 2024 Mining Issue of Canadian Securities Exchange Magazine, attended exciting events, had our CSE-hosted VRIC panels featured on VRIC Media, and released two episodes of The Exchange for Entrepreneurs Podcast, all this past February.

Canadian Securities Exchange Magazine: The Mining Issue

To gear up for PDAC in March, we launched the 2024 Mining Edition of Canadian Securities Exchange Magazine.

This issue offers insight into five CSE listed mining companies racing to unlock economic opportunities across North America as green becomes the new gold.

The CSE listed companies featured in this edition include:

Read Now: Canadian Securities Exchange Magazine: The Mining Issue

The MicroCap Conference

We had an incredible time connecting with entrepreneurs and capital markets professionals at the Microcap Conference at the Caesars Atlantic City Hotel & Casino in New Jersey on January 30-February 1, 2024. 

This three-day conference provided attendees with extensive networking activities, expert panel discussions around topics critical to the microcap community, and company presentations, along with an entertaining casino experience that made the most of the venue.

It was great to see all the CSE listed issuers in attendance at this incredible event put together by DealFlow Events!

Mines and Money Miami

On February 22-23, 2024, the CSE travelled to vibrant downtown Miami, Florida to attend Mines and Money Miami.

We enjoyed connecting with friends and colleagues in the North and Latin American mining finance ecosystem over two days of programming covering today’s most pressing topics, including junior mining companies’ role in securing critical mineral supply chains for the energy transition and the impact of legislation. 

Several CSE listed issuers also attended the event, including:

VRIC 2024’s CSE-Hosted Panel Replays

At VRIC 2024, we were proud to host two panels, which were moderated by the CSE’s Anna Serin, Director of Listings Development for Western Canada and U.S. & Vancouver Branch Lead. 

The first panel, “Beyond Borders: Navigating Cross-Border Capital and Liquidity Opportunities in Resource Companies,” featured the CSE’s Richard Carleton, CEO, and Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group.

Catch the replay on VRIC Media’s YouTube for insights into opportunities for raising capital beyond our borders, how the CSE works with the OTC to help Canadian companies access private placement capital in the U.S., and other considerations, including DTC eligibility, fungibility, and more.

Watch Now: Beyond Borders: Navigating Cross-Border Capital and Liquidity Opportunities in Resource Companies

The second panel, “Powering Tomorrow: Taking Stock of Global Lithium Supply in the Energy Revolution,” featured Jason Barnard, President and CEO of Foremost Clean Energy (CSE:FAT), and Scott Eldridge, CEO of United Lithium (CSE:ULTH).

Tune in to the replay on VRIC Media for an in-depth discussion on the interplay between lithium and electrification, the factors impacting lithium supply and demand, and shifting to domestic supply and processing in North America and Europe.

Watch Now: Powering Tomorrow: Taking Stock of Global Lithium Supply in the Energy Revolution

Jason Barnard and Scott Eldridge on The Exchange for Entrepreneurs Podcast

Jason Barnard, President and CEO of Foremost Clean Energy (CSE:FAT), and Scott Eldridge, President and CEO of United Lithium (CSE:ULTH), joined Anna Serin once again for this year’s second episode of The Exchange for Entrepreneurs Podcast.

Jason Barnard and Scott Eldridge discussed all things lithium, including factors impacting the electric vehicle market; global jurisdictions for mining and processing, including China’s involvement; the American Inflation Reduction Act and EU Critical Raw Materials Act; challenges with lithium extraction; and upcoming outlook.

Watch Now: Jason Barnard & Scott Eldridge on All Things Lithium | The CSE Podcast E2-S4

Thomas Caldwell’s 2024 Outlook on The Exchange for Entrepreneurs Podcast

Thomas S. Caldwell, Chairman of Caldwell Securities, joined us for a special episode of The Exchange for Entrepreneurs Podcast, where he shared his annual financial outlook for 2024, including predictions on key factors such as interest rates and equity markets, reasons for investor optimism, insight into the “special case” of Canada, and a snapshot of tech, energy, and more.

Watch Now: Thomas S. Caldwell’s Financial Outlook for 2024 | The CSE Podcast E3-S4

March Highlights

Back in March, we returned to PDAC for one of its best editions yet, held our International Women’s Day Market Open, and travelled across the United States for a number of fantastic events.

PDAC 2024

This year’s PDAC was one of the best yet. From posh parties to connecting with mining and capital markets leaders from all over the world, the CSE team had an amazing time taking in the full conference experience and engaging in all things mining and exploration. 

By the numbers, we had more CSE listed companies exhibiting at the Investors Exchange than ever before; attendance and engagement at our events was at an all-time high; and the continued popularity of our conference-related content reflects our ongoing commitment to showcasing the entrepreneurial spirit that permeates throughout the Exchange. 

Additionally, our role as an official media partner enabled us to distribute the Mining Issue of Canadian Securities Exchange Magazine to our many booth visitors and to all convention attendees.

We look forward to returning again next year!

Read Now: Looking Back on a Successful PDAC 2024

The CSE’s PDAC Investor Luncheon

Our highly-anticipated CSE Investor Luncheon brought together various members of the investment, capital markets, and mineral exploration communities for a thrilling afternoon filled with company presentations, a special panel, and networking. 

The CSE’s Rob Cook, Senior Vice President of Market Development, emceed the pitch presentations, which featured several CSE listed issuers, including:

The presentations were followed by a special discussion, “Fact-and-Fiction – Short Selling in the Capital Markets,” with panelists Terry Lynch, Founder of Save Canadian Mining, and the CSE’s Richard Carleton, CEO.

We couldn’t have had such a successful luncheon without our sponsors, Computershare, DealMaker, MNP, Grove Corporate Services, Issuer Direct, ACCESSWIRE, Marrelli Trust Company Limited, Marrelli Support Services, DSA Corporate Services, Newsfile, Outlier Marketing, QuoteMedia, Independent Trading Group (ITG), and W.D. Latimer Co. Limited.

View The Album: CSE’s Annual PDAC Investor Luncheon 2024

Ringing the Bell for Gender Equality

The CSE was proud to participate in the Ring the Bell for Gender Equality 2024 initiative this International Women’s Day by hosting a special market open.

We welcomed delegates from Room Women’s Network and Caldwell Securities to ring in the market to promote gender equality and celebrate the power of women in business.

Watch Now: Ringing the Bell for Gender Equality at the CSE

The Capital Links at THE PLAYERS Investor Event

The Capital Links at THE PLAYERS Investor Event, hosted by Investor.Events, in Jacksonville, Florida was one “fore” the books. The CSE was proud to sponsor and attend this action-packed event on March 15-17.

Investors, finance professionals, funds and family offices, public issuers, and other members of the investment community came together for a full day of one-on-one meetings, followed by an exclusive networking experience at a special VIP Suite on Championship Sunday for THE PLAYERS Championship, “the PGA Players 5th Major,” at TPC Sawgrass.

Going Public and Raising Capital in Canada (Miami)

We were excited to return to the beautiful, sun-soaked Miami beachfront on March 18 for our Going Public and Raising Capital in Canada event, co-hosted by our event partner, Corporate Counsel LLP.

Richard Carleton and Michael Bluestein, Founding Partner of Corporate Counsel, gave a series of expert presentations exploring topics surrounding opportunities and strategies for successfully entering the public markets in Canada, followed by a networking reception.

The 36th Annual ROTH Conference

On March 17-19, the 36th Annual ROTH Conference, hosted by ROTH Capital Partners, returned at the Ritz-Carlton, Laguna Niguel in sunny Dana Point, California, and the CSE was proud to sponsor this invite-only event.

This exclusive event provided attendees with the renowned ROTH Conference experience and offered unique opportunities to meet with and learn from hundreds of private and public companies across a variety of sectors, including technology and media, sustainability and industrial growth, AgTech, energy, metals and mining, healthcare, and more. 

The CSE’s Anna Serin, Director of Listings Development for Western Canada and U.S. & Vancouver Branch Lead, presented on the “Benefits and Paths to Pursuing a Canada/U.S. Dual Listing” panel, which provided insights into the benefits and challenges of listing first in Canada, the differences between the U.S. and Canadian markets, and the process for pursuing a dual listing on NASDAQ, NYSE, or Cboe.

April Highlights

We’re continuing our rewind with our April event circuit, which took us to exciting locales across Canada and the U.S. to connect with colleagues from various industries.

Benzinga Cannabis Capital Conference – Spring Edition

Back in April, we had a great time soaking up the sun in Hollywood, Florida at the spring edition of the renowned Benzinga Cannabis Capital Conference

The schedule was packed with engaging content that provided a deep dive into all things cannabis, along with plenty of opportunities to catch up with new and familiar faces.

One of our favourite moments was hosting a sponsored cabana with ATACH at the Diplomat Beach Resort. Conversations were buzzing as we connected with our peers in the cannabis space over great food, refreshing drinks, and beautiful poolside scenery.

STANY’s 88th Annual Conference

We made our way to New York City for the 88th edition of STANY’s Annual Conference.

Along with engaging in fascinating conversations and exploring topical subject matter, including the impact of AI, sourcing liquidity in today’s markets, and the future of retail trading, the CSE also had a chance to share our insights at the “Navigating Canadian Markets” panel.

During this panel, the CSE’s Richard Carleton, CEO, joined Rizwan Awan, President of Equities Trading and Head of TMX Markets, Products & Services at TMX Group, and moderator, Shelley Eleby, Managing Director and Head of Marketing Electronic Trading at BMO Capital Markets, to dive into this important topic.

The 2024 KEG Conference & Trade Show

Our mining event circuit continued with the 2024 KEG Conference & Trade Show in Kamloops, BC, hosted by Kamloops Exploration Group.

We were proud to sponsor the event, including a special gold panning class with the famous Yukon Dan, and to connect with the mining and investment communities over an action-packed two days.

Planet MicroCap Showcase: VEGAS 2024

It was a pleasure to wrap up our April event circuit at the famed Paris Las Vegas Hotel & Casino for the Planet MicroCap Showcase: VEGAS 2024. 

Our team enjoyed connecting with the microcap community, taking in the always-entertaining thrills Vegas has to offer, and participating in insightful discussions. Plus, it was great to catch a presentation from CSE listed issuer, Foremost Clean Energy (CSE:FAT). 

We were proud to be a sponsor of the event and to share insights into how microcap companies can navigate the capital markets journey at the panel, “MicroCap Alternatives for Reducing Costs, Raising Capital, and Managing Liquidity in 2024,” where the CSE’s Anna Serin answered questions from moderator, Shelly Kraft from Planet MicroCap, alongside fellow panelists, Joe Alagna, Chairman & CEO at Joseph Gunnar & Co.; Joseph Oltmanns, Senior Vice President of Corporate Services at OTC Markets Group; Jason Bishara, Financial Practice Leader at NSI Insurance Group; and Shawn Severson, CEO & Co-Founder at Water Tower Research.

Watch Now: PANEL: MicroCap Alternatives for Reducing Costs, Raising Capital, and Managing Liquidity in 2024

May Highlights

May 2024 was a historic month for the CSE: our 20th anniversary as an exchange! We commemorated this major milestone with special market opens and celebrations plus attended a key mining finance event.

Celebrating 20 Years as an Exchange

This year has been monumental for the Canadian Securities Exchange, as we’re celebrating our 20th anniversary as an exchange.

We published a special press release and an anniversary page on our website to commemorate this major milestone and look back on the past 20 years, starting from our origins in 2004 when the CSE was the first exchange to be recognized in Ontario in more than 80 years.

In the press release, the CSE’s Richard Carleton, CEO, shared his personal reflections on our journey, including what sets us apart, our team’s dedication, and the challenges we’ve faced along the way. 

We also highlighted some of our biggest achievements to date as one of the world’s fastest-growing exchanges, including more than $26 billion in public capital raised on the CSE, the creation of the Senior Tier, the launch of a second trading book called CSE2, the evolution of our brand, and more. 

Our success has fuelled the success of our listed companies, investors, dealers, and traders for two decades, and we’ve only just begun.

Learn More: Celebrating 20 Years as an Exchange

20th Anniversary Market Open in Toronto

To kickstart our 20th anniversary festivities, we held a special Market Open at our Toronto headquarters on May 7, 2024. Richard Carleton was joined by CSE team members and supporters to ring the bell and share memories and insights from the Exchange.

Watch Now: The CSE Rings the Bell Celebrating 20 Years as a Stock Exchange

20th Anniversary Celebration in Vancouver

Continuing the festivities, we held a 20th Anniversary Celebration in Vancouver, BC, where we shared memories with our friends and colleagues over great food at the fantastic Five Sails Restaurant. It was a wonderful time celebrating with everyone!

View The Album: CSE’s 20th Anniversary Celebration – Vancouver

SME’s 9th Current Trends in Mining Finance Conference

Amidst the festivities, the CSE attended SME‘s 9th Current Trends in Mining Finance Conference in New York City.

Not only did the event dive insightfully into today’s most pressing topics in the mining finance space, but it also provided Richard Carleton with the chance to share his expertise on two noteworthy occasions. 

The first was the “Capital Markets: Trends in Listings, Trading, and Investor Engagement” panel, where Richard was joined by John Viglotti and Jason Paltrowitz from OTC Markets Group, Jonathon Deluce from Abitibi Metals (CSE:AMQ), and Doug Porter from Fathom Nickel (CSE:FNI).

The second was an at-event interview with Mark Bunting from Red Cloud TV, in which Richard discussed mining investment trends, market challenges and opportunities, and accessing the U.S. capital pool.

Watch Now: RCTV Interview at SME New York 2024

June Highlights

In this edition, we’re reminiscing on June, where we continued our 20th anniversary celebrations, released a new podcast episode, became part of the World Federation of Exchanges, and exhibited at an AgTech event.

20th Anniversary Celebration in Toronto

During the summer, our 20th anniversary celebrations were in full swing. Following our Vancouver party, we hosted another in-person gathering for our friends and colleagues in Toronto at The Fifth Social Club. We had a wonderful time reminiscing at this stylish venue.

View The Album: CSE’s 20th Anniversary Celebration – Toronto

Chris King on The Exchange for Entrepreneurs Podcast

In June, we welcomed Chris King, Senior Vice President, International Corporate Services at OTC Markets Group, to The Exchange for Entrepreneurs podcast, for an in-depth discussion about how to best leverage a Canadian listing through the facilities of the OTCQX and OTCQB markets.

Chris King’s insights included the benefits for CSE listed companies to quote on these markets, steps to prepare, the cost, reference clients, maximizing the quote, and more.

Watch Now: Chris King on Listing Local, Trading Global | The CSE Podcast E4-S4

The CSE Joins the World Federation of Exchanges

The CSE achieved another major milestone in June: our admittance into the World Federation of Exchanges (WFE)! 

Becoming a full member of the WFE, the flagship global industry association for regulated exchanges and clearing houses, comes with several benefits, including raising our international profile, enhancing the value of CSE issuers, and advancing our objective of facilitating global access to trading on the Exchange. 

To receive WFE membership, applicants need to demonstrate that they play a significant role in the financial markets of their country of origin and are serving a public good, among other requirements.
Thanks to the WFE leadership for approving our application, as well as its colleagues from the Johannesburg Stock Exchange, the Warsaw Stock Exchange, and the B3 (Brazil Stock Exchange and Over-the-Counter Market), who conducted a detailed review of the application.

Read Now: Canadian Securities Exchange Receives Membership in the World Federation of Exchanges

Canada’s Farm Show

We capped off the month by returning to Canada’s Farm Show in Regina, Saskatchewan, on June 18-20, 2024.

As always, Viterra put on a great event that offered a deep and engaging dive into all things AgTech and the future of farming. It was fantastic to see such a large crowd of attendees from Canada and around the world, and it was a pleasure to welcome so many visitors to our booth at the Viterra International Trade Centre.

July Highlights

In this recap, we’re rewinding to July, an exciting month where we released the Cannabis Issue of our magazine, enjoyed our annual Calgary Stampede festivities, played golf at The CSE Open event, and continued our 20th anniversary celebrations in Vancouver.

Canadian Securities Exchange Magazine: The Cannabis Issue

In June, we launched the latest Cannabis Issue of Canadian Securities Exchange Magazine. This edition spotlights five cannabis companies gearing up to make the most of the coming opportunities with important regulatory change on the horizon.

The CSE listed companies featured in this issue include:

Read Now: Canadian Securities Exchange Magazine: The Cannabis Issue

20th Anniversary Celebrations at the Calgary Stampede

We were delighted to don our cowboy hats once again at the world-famous Calgary Stampede this July.

Maintaining a long-running tradition, the CSE kicked off the Stampede with our annual Stampede Breakfast, complete with a steady supply of pancakes, country music, and lively discussions with friends and team members.

And to commemorate our 20th anniversary year, we filmed a short video starring the CSE’s Richard Carleton, CEO, who shared a brief history of the Exchange and highlighted the important role Western Canadian communities continue to play in supporting publicly funded entrepreneurs on the CSE.

Watch Now: The CSE Celebrates 20 Years at the Calgary Stampede

The CSE Open 2024 – Toronto

This July, we picked up our clubs and took to the great outdoors for our annual CSE Open at the Royal Ontario Golf Club in Toronto! 

Congratulations to Taylor Howie and Adrian Capobianco for winning this year’s event. Shout out to our partners and sponsors for helping to make this event a success and for raising funds in support of Centennial Infant and Child Centre Foundation and Lions Foundation of Canada Dog Guides. 

See you out on the green again next year!

View The Album: The CSE Open 2024 – Toronto

CSE 20th Anniversary Special Market Open in Vancouver

To further spotlight both our 20th anniversary and the integral role of Western Canada in the Exchange’s history, we held a special celebratory Market Open in Vancouver on July 2, 2024. Richard Carleton was joined by Anna Serin, Alexandra Cosgrove, and other members of the CSE Vancouver team to open the day’s trading session.

Watch Now: The CSE Rings the Vancouver Bell Celebrating 20 Years as a Stock Exchange

August Highlights

In August, we had the pleasure of co-hosting an exclusive summer mixer, attending and golfing at an annual conference, presenting at a critical minerals summit, and reflecting on a summer intern’s time with the Exchange. 

VanCap Rising Leaders Summer Mixer

The CSE teamed up with DuMoulin Black, MNP, and Market One to host our exclusive VanCap Rising Leaders Summer Mixer. 

We kicked off the event with a fireside chat featuring the legendary Terry Salman, one of Canada’s most dedicated philanthropists and a renowned figure in mining finance, who shared insights from his rich and varied 35-year career, followed by an afternoon of networking with peers in the capital markets over summery drinks and delicious snacks. 

VanCap Rising Leaders is a program designed for professionals in the capital markets to build their centre of influence, create deal-making opportunities, network, and develop personally. 

If you’re interested in becoming a member of the VanCap Rising Leaders program, please contact [email protected] to gain access to these exclusive events.

CSTA Annual Conference 2024

Nothing quite says summer at the CSE like a golf tournament. At the CSTA 2024 Annual Conference in Québec City, we had the chance to tee up while enjoying an engaging conference experience. 

Hosted by the Canadian Security Traders Association, this conference brought the capital markets community together for insightful presentations, networking opportunities, innovative exhibits, and enjoyable offsite events.

CMI Summit III

Keeping the momentum going with our August event schedule, we were pleased to sponsor and attend the Critical Minerals Institute’s CMI Summit III at the prestigious National Club in Toronto. 

It was great catching up with CSE listed mining issuers in attendance and our peers in the critical minerals space, including industry frontrunners, investors, and government representatives. Plus, the CSE’s Richard Carleton, CEO, was presented on behalf of the Exchange.

Interview With a Summer CSE Intern Alum

To help future leaders in the capital markets get first-hand experience, the CSE proudly welcomes interns and co-op students to the Exchange, and we’ve seen many alums go on to have thriving careers.

This past summer, one of our interns, Ethan, sat down with us to reflect on his experience with the CSE before heading back to university. Enjoy this brief interview to learn what a typical intern’s experience is like with us.

What key skills or knowledge did you develop during your internship, and how do you think they will benefit your future career?

During my time at the CSE, I picked up many useful skills and learned a lot about how capital markets work. One of the biggest things I improved on was my ability to make smart decisions based on data analysis and market research. These skills, along with the experiences I had, will most definitely help me tackle bigger and more challenging projects in the future. From this term, I managed to develop a greater understanding of the industry and feel more confident in my ability to think critically and strategically about market trends and challenges.

Can you share a specific project or task that challenged you the most, and how you overcame it?

I had the chance to work on a lot of fascinating projects, but the toughest one was doing a market analysis of the Borsa Istanbul exchange to see if the Turkish mining sector was worth expanding into. For this, I had to analyze the performance of the BIST 100 and BIST Mining Indices, study the Turkish mining industry, and figure out how Turkey’s economy and politics would affect the market. Although this was my first time completing such tasks, I managed to successfully form an end of term presentation that I would later present.

How has your understanding of the stock exchange industry evolved since you started this internship?

Before this internship, I had a basic understanding of stock exchanges. I knew why companies go public and how investors make money, but I didn’t really get how stock exchanges worked behind the scenes. After my time at the CSE, especially thanks to all the lunch-and-learn sessions, I learned how exchanges make money, the rules companies need to follow, and the whole process of going public.

What advice would you offer future interns?

My biggest advice to future interns would be to always look for chances to learn from everyone you meet. Whether you’re chatting with colleagues or just bumping into people in the elevator, you can pick up new insights everywhere. The faster you embrace that mindset, the more you’ll learn.

Any memorable moments or highlights from your time with the Listings Development Group?

One of the best moments for me was helping set up and attend the CSE’s 20th anniversary party. It was awesome to be part of something so meaningful for the exchange. I got to meet a bunch of CEOs from companies listed on the exchange and heard some great advice from tenured capital market professionals. It was definitely an unforgettable experience.

September Highlights

September was filled with travel across North America. Some of the highlights included the CSE team heading back to Beaver Creek, Colorado for the renowned Precious Metals Summit; dropping anchor in beautiful Halifax, Nova Scotia to host another segment of our successful Going Public and Raising Capital in Canada series; swinging over to scenic West Vancouver to enjoy some picture perfect putting, and more. 

Precious Metals Summit Beaver Creek

There was more than gold, silver and platinum on the docket as the CSE team travelled to beautiful Beaver Creek, Colorado on September 10-13 for the renowned Precious Metals Summit. 

This exclusive independent investment conference, brought together explorers, developers, and emerging producers of gold, silver, and platinum group metals alongside investors, and executives from senior precious metals companies.

It was great to connect and spend time with the mining and investment communities and exhibiting CSE listed issuers:

Plus, you can’t beat the breathtaking Colorado mountain views and the legendary culinary skills of the CSE team. Until next year!

View The Album: Precious Metals Summit – Beaver Creek 2024

Going Public and Raising Capital in Canada: Halifax Event

In mid-September, Going Public and Raising Capital in Canada was back for the second time this year, and the CSE was excited to host this edition in Halifax, Nova Scotia.

The CSE’s Richard Carleton, CEO, and Scott Pritchard, Senior Advisor of Listings Development for Québec & Eastern Canada, had a wonderful time presenting to the capital markets community and catching up with friends old and new at the Muir Hotel. 

It was also a pleasure to welcome expert speakers on Canada’s public markets:

Thanks again to our sponsors, MNP, Computershare, Lebeuf Legal, and Laurel Hill Advisory Group. We look forward to the next iteration of our Going Public and Raising Capital in Canada events!

The CSE Open 2024 Vancouver

We enjoyed closing out summer at The CSE Open 2024 Vancouver on September 19 at the Gleneagles Golf Course in West Vancouver. 

It was a fantastic day of golf with friends and colleagues. Not only did we get to work on our swings and enjoy the stunning West Vancouver views, but this event also raised money in support of Family Services of the North Shore. The CSE Open Vancouver edition was made possible by generous supporters including premier sponsor, DuMoulin Black; putting contest sponsor, Investor.Events; and event sponsors, Torrey Hills Capital, Endeavor Trust, Haywood Securities, MNP, Purves Redmond Limited, Market One Media, Dog and Pony Studios, and CEO.CA.

STA’s 91st Annual Market Structure Conference

The Security Traders Association’s Annual Market Structure Conference was back for its 91st edition this September, and the CSE was proud to sponsor and attend this classic STA event.

Set in sunny Orlando, Florida, this year’s conference explored typical and atypical forces impacting our market structure and the need for proactive adaptation under the theme of “Shifting the Landscape.”

We also enjoyed the many networking opportunities, including poolside sessions, a cabana event, and a golf tournament.

ArcStone-Kingswood Growth Summit 2024

To cap off a productive September, we attended and sponsored the ArcStone-Kingswood Growth Summit in Toronto.

This premier growth conference offered growing companies a space to explore listings on prominent U.S. and Canadian exchanges while providing a platform to discuss potential opportunities with investors. Plus, this year was also packed with panel discussions and presentations from companies across a range of sectors, including metals and mining, AI, and wellness.

October Highlights

In this edition, we’re looking back on October when we biked for a good cause, rang the bell for financial literacy, welcomed a mining delegation from Saudi Arabia, and attended several key industry events in Toronto, New York City and Chicago. 

Bay Street Rides FAR

Members of the CSE team had a fantastic time participating at Bay Street Rides FAR 2024, part of the Rides FAR initiative, in downtown Toronto on October 5.

This fun and impactful day of biking and walking was for an important cause: raising money needed to further autism research and increase awareness. With the generous help of our community, we were able to raise $3,500 for Autism Science Foundation Canada. 

We’re appreciative of everyone who sponsored our team and to Independent Trading Group (ITG), Caldwell Securities, and Purves Redmond Limited for their support.

View The Album: Bay Street Rides FAR 2024

The CSE Rings the Bell for Financial Literacy

On October 7, 2024, special guest Elizabeth Naumovski, host of EMPOWERED, joined the CSE to celebrate World Investor Week and “Ring the Bell for Financial Literacy,” in association with the World Federation of Exchanges and IOSCO‘s campaign to raise awareness about the importance of investor education and protection.

View The Album: CSE Rings the Bell for Financial Literacy – October 7th, 2024

Red Cloud Fall Mining Showcase

As always, we had a fantastic time at the Red Cloud Fall Mining Showcase 2024, presented in partnership with PearTree, at the Sheraton in Toronto’s financial district.

In addition to sponsoring this dynamic event, we enjoyed connecting with members of the mining and investment communities, as well as catching a presentation by CSE listed issuer, Fathom Nickel (CSE:FNI).

The Exchange Welcomes Mining Delegation From Saudi Arabia

The CSE had the pleasure of hosting a prestigious mining delegation from the Kingdom of Saudi Arabia earlier this month, a special occasion which culminated in a bell-ringing ceremony at our market centre in Toronto.

This event allowed Canadian mining professionals to connect with Saudi leaders and was aligned with the country’s economic transformation plan, Vision 2030, with mining as a key pillar of industrial growth.

Watch Now: The Exchange Welcomes Mining Delegation From Saudi Arabia

Global Markets Forum

We were pleased to sponsor and attend the Global Markets Forum, in partnership with Aquis Stock Exchange, First Sentinel, and OTC Markets Group, at the OTCQX Market Center in New York City.

This premier event featured presentations from leading Canadian, U.S., and U.K. public growth companies, insights from industry experts, panel discussions with key market participants, and one-on-one meetings with C-suite executives.

Plus, the following CSE listed issuers delivered presentations:

Benzinga Cannabis Capital Conference

It was great to be back at the Benzinga Cannabis Capital Conference for its fall edition in Chicago, Illinois.

We caught up with our friends and colleagues in the cannabis and capital markets communities, and several CSE listed companies had the chance to take the spotlight, including:

November Highlights

November was a month full of milestone moments, including the launch of the CleanTech Issue of our magazine, the return of the Summit on Responsible Investment, our first-ever WFE General Assembly and Annual Meeting, and more.

Canadian Securities Exchange Magazine: The CleanTech Issue

This November, we were proud to launch the CleanTech Issue of Canadian Securities Exchange Magazine. 

In this issue, we feature six CleanTech companies whose solutions are proving what’s possible in the quest for improved wellbeing of people and planet: 

Plus, we’ve included exclusive 20th anniversary interviews with Richard Carleton, CEO of the CSE, and senior leaders at the Exchange.

Read Now: Canadian Securities Exchange Magazine: The CleanTech Issue

Summit on Responsible Investment Video Series

After a successful in-person debut in 2023, the CSE was pleased to launch the 2024 installment of the Summit on Responsible Investment (SoRI) as an online series, which dives into the intersection of investing and sustainability. 

Tune in to learn about the future of sustainable mining, botanical synthesis technology, ESG from a mining lens, fintech and sustainable investing, and many more fascinating topics.

Watch Now: Summit on Responsible Investment 2024

WFE General Assembly and Annual Meeting

We were honoured to have CSE’s Richard Carleton and Tracey Stern represent the CSE in Kuala Lumpur, Malaysia for the 63rd General Assembly and Annual Meeting of the World Federation of Exchanges, hosted by Bursa Malaysia.

It was a great milestone for the Exchange to participate and a genuine pleasure to join fellow exchange executives and industry leaders from across the globe to discuss important trends and developments impacting the public capital markets. 

Richard also participated in the panel discussion, “Beyond the Monopoly Myth: Rethinking Competition in Financial Markets,” alongside industry leaders from Ghana, Saudi Arabia, and Mexico.

View The Album: WFE General Assembly and Annual Meeting

Richard Carleton Interviewed by Planet MicroCap

At the Planet MicroCap Showcase: VANCOUVER 2024, in association with Smallcap Discoveries, Robert Kraft, CEO and Host of Planet MicroCap, interviewed Richard Carleton for the virtual keynote, “Utilizing Canada to Access North American & Global Pools of Capital.” 

During this exclusive interview, Richard discussed the state of the markets for microcap companies, public markets versus private equity, active sectors on the Exchange, and the strategy of utilizing Canadian markets to access North American and global pools of capital and how the CSE is uniquely positioned in this space.

Watch Now: KEYNOTE: Utilizing Canada to Access North American & Global Pools of Capital with Richard Carleton

December Highlights

As 2024 comes to a close, so does our year-end rewind. Thank you for not only following our journey through the months but for following our journey as an exchange over the past 20 years. 

While we look ahead to what will surely be an eventful 2025, join us in looking back at one final month: December. Earlier this month, we attended MJBizCon 2024, headed to the U.K. for key mining events, and released our annual year-end interview with our CEO, Richard Carleton.

Please enjoy this final installment of our monthly highlights and from everyone here at the CSE, we wish you and your loved ones Happy Holidays!

MJBizCon 2024

It was great to be back in Las Vegas for the renowned cannabis event, MJBizCon.

Hosted by MJBizDaily, this event brought together thousands of global cannabis executives and featured notable speakers, like Carmelo Anthony, who shared insights and perspectives on the cannabis industry. 

This inspirational-filled conference featured important topics such as understanding the impact of AI on consumers, empowering women entrepreneurs, and navigating the regulatory landscape.

The CSE’s Dimitri Giller, Director of Listed Company Services, also enjoyed connecting with capital markets and cannabis community members alike.

Meeting the Mining Community in the United Kingdom

As part of our ongoing efforts to improve international access to the Exchange, the CSE’s James Black, Vice President of Listings Development, and Phillip Shum, Director of Listings Development, headed to London, U.K. for two key mining-related events. 

The first was the International Metals Symposium, presented by The Northern Miner, an event the CSE also sponsored. Here, we were able to engage in fascinating discussions surrounding mining and investment, including topics such as ESG and decarbonization.

Closely following the International Metals Symposium, we headed to Mines and Money @ Resourcing Tomorrow, one of Europe’s largest mining investment events. It was great connecting with the global mining and capital markets communities.

Plus, there were many CSE listed issuers in attendance:

Overall, our trip to the U.K. proved valuable, and we are looking forward to future travels to the region.

Saskatchewan Geological Open House

In December, our conference circuit also included events closer to home, such as the Saskatchewan Geological Open House in Saskatoon. 

As the premier annual event for mining and mineral exploration companies active in the province, we enjoyed drilling down into insightful technical sessions as well as connecting with mining and mineral exploration professionals at this year’s show.

Richard Carleton’s Year-End 2024 Interview 

This year has been an eventful one for the Exchange. We celebrated our 20th anniversary as an exchange, undertook policy and other adjustments to business lines, and joined an important global organization for exchanges, among other significant milestones. 

With 2025 just around the corner, the CSE’s Richard Carleton, CEO, shares his thoughts on Canadian market performance during 2024, the outlook for the year ahead, and previews important new initiatives that issuers and investors will surely want to take note of.

Read Now: Richard Carleton’s Year-End 2024 Interview

CSE Performance

The “Senior” Exchange and Other Capital Market Myths

These are tough times for many publicly traded companies. Valuations have declined alongside rising interest rates, and capital is incredibly difficult to come by across many sectors.

In a challenging market like this, some boards and management teams are trying almost anything to give their valuation, trading liquidity, and capital-raising opportunities a boost, however small. Not surprisingly, one of these moves is an old standby: switching stock exchanges.

We get it. Company leaders are right to ask for better value from their stock exchange — something we at the CSE, via our innovative thinking and superior customer service, are proud to say we bring to the table. 

What is troubling, however, is when fiction overtakes fact. When market participants base their listing decisions on storytelling that is full of inaccuracies about how markets work in general, and about the CSE in particular, it not only sows confusion among investors and public companies alike, but it robs market participants of the true nature of the choices available to them. And it is obviously antithetical to fair and efficient market function.

Unfortunately, we have seen a few of these inaccuracies in the public sphere recently. So, I would like to take the time to correct a couple of myths about Canadian stock exchanges and lay out some clear truths about the CSE.

There is no such thing as a “senior” or “tier one” exchange

There are stock exchanges of various sizes in Canada. But the idea that certain exchanges are “senior” or “tier one” just isn’t so. The truth is that every stock exchange in Canada is regulated on the same basis. 

All trading activity on each stock exchange is overseen by the Canadian Investment Regulatory Organization, which also administers the “timely disclosure” responsibilities of every public issuer. We are all in the same boat and must play by the same rules. 

Referring to a stock exchange as “senior” is a misleading marketing tactic that confuses market participants about the structure and function of stock markets. It is a naked attempt to establish superiority over other exchanges that do not, in fact, exist. 

The CSE is a stock exchange. Period. What differentiates exchanges are the issuers that they list. And contrary to what may be said about the CSE, we can list all issuers.

Anyone can invest in CSE securities

From the largest investment fund to the tiniest retail investor, everyone is eligible to invest in CSE issuers. To suggest otherwise is a myth.

Now here is where securities laws make investment more complex: Every Canadian issuer is classified as either “Venture” or “Non-Venture.” “Venture” issuers are typically smaller and less liquid, and certain institutional investors have mandates that prevent them from buying these securities. That is entirely understandable. 

“Non-Venture” issuers are larger companies and face more demanding corporate governance requirements, including larger boards of directors and tighter reporting deadlines. The advantage of this designation is that they are eligible for inclusion in many more institutional funds.

The CSE offers issuers the opportunity to choose a “Venture” or a “Non-Venture” path. In fact, the CSE is uniquely positioned in the Canadian capital markets as the only exchange with regulatory approval to list both “Venture” and “Non-Venture” issuers.

CSE issuers are also eligible for membership in index funds offered by leading international providers. One notable exception is the S&P/TSX indices, which limit inclusion to companies trading on the TSX. But nothing prevents any index provider from including CSE securities if they meet the eligibility criteria for a particular index. 

Market integrity rests on clarity

The Canadian stock exchange business is ultra-competitive at the best of times and even more so in the current market conditions. This competition provides opportunities for Canadian companies to access the capital that they need. But competition cannot and should not confuse or undermine fair and efficient markets. It is important that market participants have a complete understanding of what each exchange offers to ensure that issuers select the exchange that best meets their needs.

The CSE is proud to offer issuers a client-focused, low-fee, and innovative model that has driven our success over the nearly two decades of the Exchange’s existence. It has enabled us to grow from a startup with three listings in our first year to more than 800 listings today. 

I will not call the CSE a “tier one” exchange because, again, there is no such thing. However, I firmly believe it is the leading Canadian exchange for entrepreneurs. By providing access to the Canadian public markets with exceptional service, support, and continuous improvement, we are leading the way in creating a vibrant and innovative marketplace.

CSE Performance

Year-End 2023 Interview with Canadian Securities Exchange CEO Richard Carleton

It was a tale of two stock markets in 2023, with large-cap indices nearing record highs, while the shares of smaller companies struggled to find steady footing. Ongoing geopolitical uncertainty didn’t help, but if one had to name a single factor explaining the divergent performance, most observers would point to interest rates, which have surged manyfold from their pandemic trough that ended in the latter half of 2021.

History suggests that small-cap companies will again have their day in the sun. Reasons for optimism include expectations for a softening interest rate environment and the undeniable global trend toward greater electrification, which will continue to present opportunities to companies of all sizes. As is always the case with financial markets, timing is the hardest thing to predict.

Through all of this, the Canadian Securities Exchange maintained steady growth in its issuer base in 2023, while also introducing important changes to listings policies, margin eligibility, and its visual brand.

In a late-November discussion, CSE Chief Executive Officer Richard Carleton offered his perspective on markets at home and abroad, as well as his outlook for 2024, as the Exchange gets ready to mark a particularly important milestone.

Every year is different for the capital markets and in 2023 it was the interest rate environment that took centre stage. How would you characterize the capital markets in 2023 based on your interaction with issuers and others in the financial community?

It’s a tricky question and my initial reaction is that it was unprecedented, difficult, and a little strange — these are the words that come to mind. The first big issue is a lack of trading activity in all of Canada’s public markets, but particularly in the junior capital markets. The last time we saw turnover levels this low was 10 years ago. It has been a significant decline given that we were at record levels only two years ago, which was the height of the pandemic. To see declines in overall trading activity on the order of 70% to 80% is something that in my career, which dates back some 35 years in the capital markets, is unprecedented.

I think it’s fair to say that the interest rate environment and the overall economy is likely the culprit. As we know, retail investor participation is very important, particularly for the junior capital side of the markets, and there is a lot of pressure on Canadian families from an inflation perspective, housing costs, mortgage renewals, and so on. So, I think we are seeing that decrease in activity as a result.

That said, there are reasons for tremendous optimism because we have had many new companies access public capital through the Canadian Securities Exchange over the course of the year. We are not at the record levels we saw in 2021 or 2022 in terms of new companies coming to market, but we are still going to see roughly 100 companies list in 2023, which is extraordinary growth.

There has been a significant shift in the nature of those companies. In the last couple of years, we have seen a lot of investment in battery, strategic, and critical minerals, which are principally lithium, graphite, copper, nickel, cobalt, zinc, and rare earth elements.

This obviously takes place in anticipation that as the economy further electrifies and we bring new battery plants into production, there will be considerable demand for all of these minerals. Given the lack of new capacity brought on line for these minerals over the past 20 or 30 years, the belief is that there is a tremendous opportunity for Canadian companies, whether they are mining in Canada or internationally, to fill that demand.

So, as I say, we are in this kind of strange situation where we have a very robust listings pipeline and new listings cohort from 2023, but at the same time, we see participation rates and asset valuation levels that are disappointing and somewhat frustrating for company management teams.

You just described a year that had as many challenges as opportunities, yet the CSE is on pace for an impressive number of new listings across a wide variety of business sectors. What enabled the CSE to perform so well?

We attract the majority of new companies coming into Canada’s public marketplace at this time. There are a number of reasons for this, but I think that the most important factor is the excellent working relationship our listings regulation team has built up over the years with entrepreneurs and their legal, accounting, and investment banking advisors. 

People feel very comfortable working with the team, and I believe there is also an appreciation for the opportunities we provide through our listings development group to help showcase the unique stories of our issuers to a marketplace that, as I say, is challenging at the moment. So, it’s really both as the company lists on the CSE, and then as they look to grow in part through a relationship with the CSE, that we have an opportunity to help our issuers achieve their goals.

The CSE underwent a significant visual rebrand in 2023 that brought with it a new slogan: Always Invested. Why was now the right time and what does the refreshed brand represent?

I’d say there are two things. The first is that we have been involved with our partners at the securities commissions on a rebuild of our listings policies, really for the first time in the 20-year existence of the organization. There are significant changes to both tighten up the requirements for all companies listed on the exchange, as well as the creation of a senior tier which will enable us to regulate larger, more mature companies on a similar basis as they would be on larger exchanges in North America.

With that was really the recognition that we have moved past the start-up phase and are now a material part of Canada’s public markets. The visual identity of the brand is meant to convey our evolution. The logo is bold with forward momentum, it represents stability and, to a smaller degree, modernization and disruption. 

The slogan “Always Invested” is a promise to our customers and partners. A promise that we will always be invested in quality service and the future of efficient public capital markets. 

Was the decision to look at the listings policies mostly an internal one or did the broader financial community influence it as well?

The drive to update the listings policies came from a number of sources. We had feedback from the entrepreneurial, legal, and audit communities in terms of where our policies should be headed. And we work very closely with the regulators in terms of supporting investor protection and promoting capital formation and liquid markets through availability of information on companies.

We concluded that we could do a number of things to update the approach we have taken from when the listings manual was first drafted in 2003. So, with the benefit of 20 years of experience and feedback from various stakeholders, it was time to make significant changes.

The CSE will reach its 20th year as a recognized exchange in May 2024. You must already be planning a celebration of this milestone. What is in store and what can issuers and investors expect from the CSE in the next 20 years?

The first question is the easiest in that we are certainly looking to mark the event, but in ways that are sensitive to the difficult financing conditions many of our issuers are finding. Of course, times are challenging also for the investment dealers who we work with on the corporate finance and trading sides. So, I wouldn’t expect anything too over the top, but it is important that we celebrate the milestone because it is significant. 

I like to tell entrepreneurs when they are considering working with the CSE that we are an exchange that has experienced many of the same challenges and triumphs as a company that they are going through: we were a start-up that initially struggled to find an audience for its services, went through multiple pivots as we looked to find our way in an intensely competitive market, had to raise capital during very difficult market conditions but ultimately succeeded by never losing sight of our goal, which is to build a great exchange. We will be celebrating these achievements next year as we reach our 20th year as an exchange. 

As for the next 20 years, that’s a really good question. There has been a lot of criticism of traditional finance models from our peers in the crypto world: they are looking to decentralize trading facilities and disintermediation of service providers like traditional brokers, custodians, clearing agencies, and the like. From my perspective, the system we collectively operate for access to trading and capital through the traditional stock market environment has evolved to respond to a series of challenges over many years. It is actually very robust.

All of the systems and processes that had to be re-invented for crypto trading are already deeply baked into the investor protection and business processes that we have in what they call the legacy or “centralized finance” world, as the crypto community sometimes refers to it. 

My point is that the exchange trading environment is likely to look an awful lot like it does now, with more technology applications eliminating the remaining manual processes from the trading world, and facilitating the availability of better and more timely information for investors.

A visit to Australia earlier in the year brought the opportunity for new perspective on a capital market that is often compared to Canada’s. What can you tell us about the market there and the ambitions of the local financial community?

What’s interesting is that before we left for Australia, and since we returned, I saw articles in the Canadian business press suggesting that Australia is eating Canada’s lunch when it comes to embracing and supporting the new generation of companies in the strategic minerals space. When we were in Australia, we saw opinions expressed in the local financial press that Canada was eating Australia’s lunch when it came to supporting the investment and development of companies in the strategic minerals space. I’m not sure who is right or wrong, but clearly there is a difference of opinion on the point!

It’s clear that Canadian mining companies have been looking for capital from the Australian market. It appears that there are a number of Australian funds that are prepared to invest in relatively early-stage exploration companies, and also that companies from the CSE, and Canada in general, have had some success in raising capital from Australian investors.

The window seems very tight for raising additional money here in Canada so when a couple of Canadian companies had success in Australia, others followed that lead and attempted to replicate their experience.

From our perspective, we are looking to remove as many barriers and costs as we can for companies on the CSE to raising capital in Australia, and will support CSE-listed issuers seeking admission to the ASX in any way that we can.

Staying with the mining theme, can you share your thoughts with us on the sector’s outlook for 2024?

It is clear that good projects across a wide range of potential minerals are getting funding and entering the public markets. They are able to raise that first round of investment to support the first phase of exploration.

The new issuers from 2021 and 2022 that now have a season of drilling under their belts have been generating some positive reports. Normally, you would expect to see positive price performance, but for some reason, we are not seeing it. As a result, when companies raise their second round, the funding is dilutive for their original investors because the transaction is conducted at the previous issue price, or even lower for some of them.

This is a challenge and a source of some frustration for the industry. That said, we continue to see good projects come to the CSE and there is an extensive pipeline of companies preparing to come to market in 2024.

I hope and expect that with a return to more normal levels of retail participation as interest rates begin to come down in 2024, which I think is a near certainty, you will see the cycle happen where the management teams that successfully advance projects are rewarded with better market valuations and are able to raise significant additional funds at higher prices.

The cannabis sector has gone through some adjustment of late. What has been the CSE’s experience and have you had any feedback from cannabis issuers that stands out in your mind?

Cannabis issuers in many respects are very similar to those in the mining sector right now in that there is a degree of frustration from company management over lack of support in the secondary market as far as asset valuation goes.

We have a number of companies listed on the CSE which continue to build market share in the United States, and there continue to be new states that legalize for adult recreational purposes, which opens up new markets for these companies.

But it appears that the investment community is focused on legislative progress toward either rescheduling of cannabis from a Schedule I to a Schedule III substance, which could result in significant tax relief for companies in the United States, or toward some form of outright legalization for adult recreational purposes on the Federal level.

As a result of these challenges with their equity market valuation, many of the larger companies are raising debt capital by either mortgaging tangible assets or securing lines of credit through the significant cash flow a few of these larger companies are generating. It is a very challenging time for these companies and my hope is that we begin to see more institutional participation and more long-term investors with a sophisticated understanding of the prospects and outlook for these companies. That should create the conditions for better price performance that recognizes the progress that many of them have made over the last five years.

In June, CSE issuers became eligible for margin following a decision by the Canadian Investment Regulatory Organization. How have issuers benefited since that decision was made?

It’s a benefit that flows to the investment dealers when they hold CSE securities in their own names on an overnight basis. The changes mean that, for eligible securities, they don’t have to take 100 cents on the dollar as a capital hit and will see significant reductions on that charge against their firm’s regulatory capital.

I know that sounds like deep inside baseball, but the practical benefit for an issuer is that it can significantly decrease the dealer’s cost of conducting an offering on behalf of the issuer. For many of these companies, the dealer will hold the stock in its inventory for a significant period of time. It is very expensive if they are tying up regulatory capital to hold that position.

This change should, and will, facilitate a lower cost of capital for CSE issuers.

It is always up to the investment dealer to determine if they will permit a client to hold a security in a margin account; the regulatory change does not mean that CSE securities will become eligible for margin accounts. Investors will have to ask their dealer about the issue. 

We took a 20-year look forward earlier in the discussion. Let’s shorten the timeline and conclude with your thoughts on what the CSE plans to achieve in 2024.

We’re deep in the planning stages of our forecast, our budget, and the strategic plan for 2024, and there are a few things I would highlight.

We saw tremendous growth in our staff complement in 2023 as we powered up to service our ever-growing issuer population and to administer many of the new listings policies implemented over the course of the year. We should be quiet on the “new hires” front in 2024.

There will be demand for new capital from the mining companies, in particular, who joined the Exchange over the last three years. The CSE will do what we can to assist these companies in reaching sources of capital in Canada, the U.S., and overseas. We’ve talked in past years about the preferred access Canadian public companies have to the U.S. capital markets; I believe that the U.S. could be an important source of capital for the CSE’s mining issuers in the coming years. We also want to work with the industry to assist them in any way we can to engage with a younger generation of investors looking to support the energy transition through their investment portfolios. 

Overall, we are being quite conservative in our expectations for trading and new listings in the coming year. I personally believe that interest rates will come down sooner and faster than the broader consensus, but that probably isn’t a sound basis for us to be doing our financial planning for the year! What I am certain of is that when rates do begin to come down, there will be more robust trading volumes across the markets. It is my hope that investors take the time to get to know the issuer classes of 2022 and 2023 a little better as they come back to the market.

CSE Performance

2023 Year-End Rewind

Throughout December, we’re looking back on the year and sharing our favourite highlights from each month. To kick things off, we’re rewinding to January, when we attended a renowned mining event and published a special edition of Canadian Securities Exchange Magazine.

January Highlights

Vancouver Resource Investment Conference (VRIC)

On January 29–30, the Vancouver Resource Investment Conference (VRIC), produced by Cambridge House International, made its highly-anticipated return.

In the lead up to the conference, we had the honour of speaking with Jay Martin, President and CEO of Cambridge House, on a special episode of The Exchange for Entrepreneurs Podcast. Jay Martin spoke with us about the importance of reviving VRIC as an in-person event, his investor newsletter, and engaging with capital markets discourse from all sides. 

You can watch the episode here.

Following this insightful discussion, we were eager to connect with and learn from the many thought leaders, companies, investors, peers, friends, and colleagues in the mining space who attended this renowned conference.

Several CSE-listed issuers also exhibited at the event, including:

To close out VRIC, we held our Cross-Border Networking Reception, in collaboration with our event partners, OTC Markets, Odyssey Trust, MNP, Investing News Network, DealMaker, Grove Corporate Services, and Bennett Jones.

It was great to connect with friends old and new and to gain fresh industry insights. We hope to see everyone again at VRIC 2024!

View the album: Cross-Border Networking Reception

Canadian Securities Exchange Magazine: The Mining Issue (VRIC Edition)

In preparation for VRIC, we published  and distributed a special edition of the 2023 Mining Issue of Canadian Securities Exchange Magazine.

This issue, which offered a preview of the full edition published in March, highlights the stories of six companies boldly leaning into world-class opportunities within the context of rising interest in gold and battery metals. 

Companies featured in this edition include:

  • Irving Resources (CSE:IRV)
  • Li-FT Power
  • Relevant Gold
  • Snowline Gold
  • Tantalex Lithium Resources (CSE:TTX)
  • Western Uranium & Vanadium (CSE:WUC)

Read now: Canadian Securities Exchange Magazine: The Mining Issue (VRIC Edition)

February Highlights

Ray Williams on The Exchange for Entrepreneurs Podcast

In honour of Black History Month, we had the pleasure of speaking with Ray Williams, Vice Chairman and Managing Director of Financial Markets at National Bank Financial, on the Exchange for Entrepreneurs Podcast. 

This special episode delivers a fascinating look at the importance and limitations of Black History Month, the opportunities and benefits of furthering diversity on both a human and economic level, and the legacy of 100 Strong and Black Opportunity Fund, which both champion Black individuals to succeed in Canada. 

Notably, this discussion provides a prompt for executives and investors alike to ask themselves the question of whether they’re doing enough to investigate, encourage, and mentor talent from all backgrounds and to best position their firms for the greatest success.

Watch now: Ray Williams on “Capitalizing” on Diversity | The CSE Podcast Ep7-S3

PreDAC Vancouver & Toronto 

Leading up to the renowned PDAC Convention, organized by Prospectors & Developers Association of Canada, we teamed up with Investor.Events to host PreDAC Vancouver and PreDAC Toronto. 

Our highly-anticipated mining industry networking events were a great success, with the Toronto session knocking attendance out of the park as a sold-out event.

We enjoyed connecting with friends old and new for two exciting afternoons filled with pitches, industry insights, presentations, networking, and great company.

Enjoy reminiscing with these photo highlight albums from each event!

View the albums: PreDAC Vancouver 2023 & PreDAC Toronto 2023

March Highlights

PDAC Convention & PDAC Investor Luncheon

Organized by the Prospectors & Developers Association of Canada, the PDAC Convention has been the world’s premier mineral exploration and mining convention for over 90 years. With our strong connection to the mining industry, the CSE was proud to attend, exhibit, and be a media partner at this world-renowned event.

Throughout this four-day event, there was a high volume of activity, including fascinating programming, exhibits, and extensive networking opportunities with leaders in the mineral exploration and mining sectors. Along with connecting with attendees at our booth on the exhibition floor, we produced and provided mining-focused content, and distributed free copies of the mining edition of our magazine.

It was a thrill to connect with CSE-listed mining companies and to host our Investor Luncheon, which featured a keynote address from Mr. Peter Kent, former Minister of Environment and Climate Change of Canada, former Member of Parliament, and current ; rapid-fire pitch presentations; and was sponsored by MNP, DSA Corporate Services, Marrelli Support Services, Investor.Events, BTV, INN, Market One, Newsfile, Purves Redmond, W.D. Latimer, Vested, and SmallCap Communications.

We’re looking forward to next year’s convention!

View the album: PDAC Investor Luncheon

Canadian Securities Exchange Magazine: The Mining Issue

Expanding on the VRIC edition, we launched the full version of the 2023 Mining Issue of Canadian Securities Exchange Magazine, in conjunction with PDAC. 

This edition offers insight into mining companies that are reaching far corners of the globe, from Japan to the Democratic Republic of the Congo, in light of rising interest in gold and battery metals, including:

  • Irving Resources (CSE:IRV)
  • Li-FT Power
  • Relevant Gold
  • Snowline Gold
  • Tantalex Lithium Resources (CSE:TTX)
  • Western Uranium & Vanadium (CSE:WUC). 

In addition to featuring these fascinating stories and perspectives, the full edition spotlights the CSE’s Anna Serin, Director of Listings Development Western Canada and US and Vancouver Branch Lead, who shares her family connection to the mining space.

Read now: Canadian Securities Exchange Magazine: The Mining Issue

April Highlights

Senior Tier Launch

This April, we were proud to announce a major policy update at the Exchange, which included the launch of our long-awaited Senior Tier. 

The CSE received final approval from the Ontario Securities Commission and British Columbia Securities Commission to materially revise its listing policies. These amendments create a level playing field with other exchanges, ushering in a new era at the CSE.

With a strengthened competitive environment for issuers, enhanced investor confidence, and greater accessibility to a broader range of institutional investors, this was a defining moment for issuers, investors, and the CSE team.

Read Now: Updated Policies for Canadian Securities Exchange Usher in New Era for Exchange and its Stakeholders

Growing Steady

We were proud to announce record growth numbers in our March market statistics, released on April 18, 2023. Not only did we see 30 new corporate listings in the first quarter of the year, but we also saw eight IPOs, proving the CSE remains the IPO destination of choice for emerging corporate issuers.

These growth numbers were a fantastic milestone to cap off the start of 2023 and set the pace for the months ahead.

Read now: Canadian Securities Exchange Reports March 2023 Performance Figures

May Highlights

Welcoming New Members to the CSE Team

Change has certainly been a central theme at the CSE this year. At the start of 2023, we had the pleasure of welcoming two new members to our management team: Tracey Stern and Stuart Schady.        

Tracey Stern, Chief Legal Officer, General Counsel and Corporate Secretary, has had an extensive career as a senior market regulator with the Ontario Securities Commission and as a chief compliance officer with a Canadian investment dealer. In her new role, Tracey is supporting the continuing evolution of the CSE as a leading exchange for global entrepreneurial companies.

Stuart Schady, Vice President of Trading & Market Data Services, assumed his new role after three years at the CSE as Director of Business Development in the Trading & Market Data Services Group, with previous experience in various roles in global financial services. In his new role, Stuart is bringing his impressive focus on service and his knowledge of the ever-evolving trading landscape.

Read Now: Canadian Securities Exchange Announces Executive Appointments

In the spring, we were thrilled to welcome Melissa Robertson, who joined as our Listings Development, Events & Content Manager, and Dimitri Giller, our new Director of Listed Company Services, to the CSE team.

With his experience and knowledge in the tech space, Dimitri was featured in the 2023 Technology Issue of Canadian Securities Exchange Magazine, which would be released in June. In this interview, he shares his journey to the CSE and his thoughts on the challenges and opportunities tech companies are facing today.

Read now: Spotlight on Dimitri Giller

SME’s Current Trends in Mining: Richard Carleton Interview

Richard Carleton, CSE CEO, was interviewed at SME’s Current Trends in Mining Conference in New York City by Mark Bunting from Red Cloud TV.

During this fascinating interview, Richard discussed the CSE’s differentiators and successes in the mining sector, saying “We’ve been very successful in the mining space over the last 12 months. Roughly 80 companies or so have joined the Exchange from the mining sector.”

Richard also shared his uniquely positioned insights into trends in critical and precious metals, liquidity and OTC markets, and more.

Watch now: RCTV | Canadian Securities Exchange On-Site SME New York

June Highlights

Margin Eligibility Announcement

In June, we were proud to announce that, under the Canadian Investment Regulatory Organization’s margin eligibility rule, the CSE was identified as an “acceptable exchange.” This decision applied immediately to all CSE-listed securities.

Margin eligibility has ushered in significant benefits for CSE-listed securities, including enhanced liquidity and reduced financing costs, and has served to make the Exchange a more attractive home for potential issuers.

We are pleased to be able to meet the ever-evolving needs of companies listed with us.

Read Now: Canadian Securities Exchange Securities Eligible for Margin

Summit on Responsible Investment

On June 27, we hosted the first-ever Summit on Responsible Investment in Kelowna. Our socially responsible investing and environmental, social, and governance event brought together a considerable crowd of professionals from a diverse range of industries for a day packed with presentations, panel discussions, company spotlights, networking, and exhibiting.

The event was a resounding success, thanks in no small part to all of our guests, presenters, collaborators, and sponsors, MNP LLP, Dentons, Odyssey Trust, Socialsuite, Business Television (BTV), irlabs, Accelerate Okanagan, and Central Okanagan Economic Development Commission. Plus, attendees raised over $6,000 for the Central Okanagan Food Bank to help combat food insecurity in Kelowna and West Kelowna.

We are excited to bring the Summit back by popular demand in 2024. In the meantime, replays of each session are available free to watch on CSE TV.

Watch now: Summit on Responsible Investment Playlist

Canadian Securities Exchange Magazine: The Technology Issue

At the end of the month, we published the 2023 Technology Issue of Canadian Securities Exchange Magazine. With widespread advancements and numerous opportunities in technology, such as the public release of OpenAI’s ChatGPT and its rapid growth to 100 million users in just two months, this issue was exceptionally relevant for investors, entrepreneurs, and the over 100 CSE-listed companies in the technology space.

In this issue, we took a deep dive into the stories of six companies that are getting ahead of the curve with innovations to solve tomorrow’s problems today, from emergency communications to plant-derived nutraceuticals to cryptocurrency forensics.

The CSE-listed companies featured in this issue include:

Read now: Canadian Securities Exchange Magazine: The Technology Issue

July Highlights

Summer Networking

The CSE had an action-packed summer filled with great company, new connections, and incredible sightseeing.

We kicked off our summer event circuit by hosting our first-ever SunDAC mining networking event in June, co-hosted by Grove Corporate Services, Newsfile, and OCI Group, and sponsored by enPercept. It was a delight to have Zero Zero Pizza as our venue and to catch up with friends and contacts we reconnected with at this year’s PDAC Convention over delicious food and great drinks.

We also had a great time donning our cowboy hats and catching up with old and new friends in Calgary for our annual Stampede festivities, including pancake breakfasts, a CSE-hosted reception, and boot scootin’ parties.

Thank you to everyone who attended SunDAC and joined us on the Stampede grounds. We look forward to another summer of networking in 2024!

August Highlights

The CSE Open

In August, we hosted the 2023 CSE Open, which brought together friends and colleagues for a fun day of golf at the scenic Wooden Sticks Golf Club.

Along with being a great opportunity for networking, bonding, and working on our golf swings, we also supported two important causes: the Centennial Infant and Child Centre Foundation and Lions Foundation of Canada Dog Guides. 

And what helped make the event a hole-in-one were our event sponsors: Independent Trading Group (ITG), MNP, and Dog and Pony Studios, as well as:

We look forward to playing another round next year!

View the album: The CSE Open 2023

Baseball Classic

We also had a great time taking our friends and clients out to the ball game at the 2023 CSE Summer Baseball Classic. 

Vancouver’s Nat Bailey Stadium was the perfect setting for a summer baseball game, with the Vancouver Canadians and Hillsboro Hopps engaged in a thrilling showdown. It was wonderful connecting with colleagues and clients, and to show our appreciation for their enduring support.

Our sponsors irlabs, Odyssey Trust, SmallCap Communications, Capital Tides Vancouver Investor Cruise by Investor.Events, International Deal Gateway, and Stockhouse, helped make this event a home run.

Enjoy these photo highlights from this unforgettable day.

View the album: The CSE Summer Baseball Classic 2023

September Highlights

2023 Precious Metals Summit Beaver Creek

In September, the 2023 Precious Metals Summit Beaver Creek brought together professionals from the investment and mining spaces for panel discussions, presentations, and networking at a beautiful mountainside setting in Colorado. 

We were proud to sponsor and attend this premier, invitation-only independent investment conference, and the CSE’s Richard Carleton, CEO; Anna Serin, Director of Listings Development for Western Canada and US & Vancouver Branch Lead; and Phillip Shum, Director of Listings Development had a great time connecting with friends and colleagues.

Several CSE-listed issuers were also in attendance at the event, including:

Plus, we had the pleasure of teaming up with MNP and MLT Aikins to host a daily social hour during the summit at the CSE Hospitality Suite. It was a fantastic way to network in between one-on-one meetings and other scheduled networking events while enjoying refreshments.

Thanks for having us!

View the photos: Beaver Creek 2023

Canadian Securities Exchange Magazine: The Precious Metals Issue

At the Precious Metals Summit Beaver Creek, we premiered the 2023 Precious Metals Issue of Canadian Securities Exchange Magazine.

This issue explores the definition of “precious” in today’s world, which seems to be taking on new meaning as energy-linked metals rise in prominence to feed the growing shift toward cleaner technology, and features the stories of precious and critical metals companies focused on bringing world-class jurisdictions to the limelight, from North America to West Africa.

CSE-listed companies featured in this issue include:

Rob Cook, the CSE’s Senior Vice President of Market Development, is also highlighted in this issue and shares his insights and trends in mining and the capital markets.

October Highlights

Family Office Showcase – London, England

We were thrilled to travel “across the pond” to sponsor a family office showcase in late September in London, hosted by Global Partnership Family Offices and presented by International Deal Gateway (IDG). 

CSE-listed issuers, Discovery Lithium (CSE:DCLI), Hillcrest Energy Technologies (CSE:HEAT), and Gemina Laboratories (CSE:GLAB) also presented at the event.

Ahead of this exciting showcase, the CSE’s James Black sat down with Liz Priestman, CEO and Director of IDG, on The Exchange for Entrepreneurs Podcast. 

The two discussed IDG’s role, family offices benefits and differentiators as investors, the focus on the UK, advice for CEOs, and IDG’s plans and success stories of companies they’ve worked with.

Watch now: Liz Priestman on Finding a Fit with Family Office Capital | The CSE Podcast Ep16-S3

International Mining and Resources Conference – Sydney, Australia

The CSE team journeyed to the land down under for the renowned International Mining and Resources Conference (IMARC) in Sydney, Australia. 

At this renowned mining event, now in its 10th year, the CSE’s Richard Carleton, CEO, and Anna Serin, Director of Listings Development for Western Canada and US & Vancouver Branch Lead, had the chance to enjoy presentations covering the entire mining value chain and network with global mining leaders, resource experts, and leading companies.

It was great to be joined by CSE-listed companies, United Lithium (CSE:ULTH) and Inflection Resources (CSE:AUCU), and to celebrate United Lithium’s victory at the pitch competition!

During the conference, Richard Carleton was also given a moment in the spotlight in an interview with Kitco Mining. Richard discussed the current state of the mining sector, raising capital as a Canadian miner in Australia, and major economic trends. 

Thanks for having us!

Read now: ‘Tremendous number of new projects’ in the critical minerals space: Canadian Securities Exchange CEO

November Highlights

Red Cloud Fall Mining Showcase 2023

We were proud to be an event sponsor for the Red Cloud Fall Mining Showcase, in partnership with PearTree, on November 7–8 at the Sheraton Centre Toronto Hotel in Toronto.

Thank you to everyone who joined us for this action-packed event. It was great to connect with colleagues and friends in the mining space and meet with attendees from around the world.

Plus, CSE-listed companies, ACME Lithium (CSE:ACME), CDN Maverick Capital (CSE:CDN), Kuya Silver (CSE:KUYA), and Latitude Uranium (CSE:LUR) were in attendance.

A special thank you to Red Cloud and PearTree for having us and for putting on such a great showcase. We’re looking forward to the next one!

MJBizCon

Thanks to everyone who joined us at MJBizCon, which took place at the exciting Las Vegas Convention Center in Las Vegas! It was great to participate in this action-packed event, explore the exhibition floor, and dive into the current state of the cannabis landscape.

Plus, CEO of the CSE, Richard Carleton alongside Anil Mall, Director of Listed Company Services, and Phillip Shum, Director of Listings Development for Toronto, had the opportunity to connect with innovators, executives, and entrepreneurs alongside issuers in the cannabis space.

Thanks for having us and inspiring us to “dare to grow”! We’re thrilled to share our photo highlights from this exciting event.

CSE Performance

Year-End 2022 Interview with Canadian Securities Exchange CEO Richard Carleton

With 2022 drawing to a close, the global financial community is looking back on yet another year of unprecedented activity across markets. Governments relaxed pandemic restrictions and wound down historic financial support for individuals and companies, just as interest rates surged in response to inflation concerns that proved to be highly warranted. Shifts in the geopolitical and security landscapes added to the uncertainty.

As always, volatility means difficult times for some and opportunity for others. The mining industry was in the spotlight to be sure, as prices for some metals weakened modestly, while others rose or remained strong. Cannabis rode expectations for regulatory change in the US to both the upside and downside.

The Canadian Securities Exchange took this environment in stride, leveraging competitive advantages that have underpinned its success by making it a popular listing destination for entrepreneurial companies from around the world. The year 2023 looks set to be transformational for the CSE, with several major developments on the horizon that are important for investors, issuers and the financial professionals who serve them to know about.

Canadian Securities Exchange CEO Richard Carleton sat down recently to discuss key accomplishments during 2022 and their meaning for the CSE, as well as to explore some of the changes on deck for 2023.

We have a number of important topics to cover, including some substantial developments set to take place at the CSE early in the new year. But before getting to these, it’s important to set the table with some thoughts on financial markets in 2022. Markets seemed more challenging to figure out than usual. What is the view at the CSE?

Well, I guess there are a few themes. The first is that mining is really driving the bus in terms of capital raised and generating the vast majority of our new listings. And different from some past mining cycles we have seen at the Canadian Securities Exchange, there is investor interest across a range of metals.

Rather than the traditional emphasis on precious metals exploration, we have seen a focus on battery metals: nickel, copper, zinc, cobalt, as well as lithium, graphite and rare earths.

Many of these companies are exploring sites where historic drilling took place. World prices for those metals could not support or commercialization of these deposits some years ago. I think it’s fair to say that given the increases in commodity prices, particularly when we consider them in Canadian dollars, the likelihood of producing mines being developed on these properties is higher than perhaps we have seen in earlier mining cycles.

On the other hand, we are seeing lower levels of trading activity on the exchange. Far fewer people working from home at this point, and I think the increase in interest rates has put a lot of investors in defensive mode, particularly retail investors. The decline in major indices, especially those tracking large technology companies, has also made people somewhat more conservative in terms of risk profile in my view.

The amount of money raised by companies on the exchange is also smaller than we have seen for the last few years. This can be explained by the fact that early-stage mining exploration companies are coming to market with relatively modest market capitalizations; they don’t need a lot of money to fund the initial phases of drilling they are looking to carry out. This contrasts with the large, integrated US cannabis companies coming to market a few years ago where single companies were raising several hundred million dollars in one go.

Overall, financing activity is robust, but it is not accounting for anywhere near the total sums of money that we saw in the latter part of 2020 and early part of 2021.

The CSE continues to pursue issuers from jurisdictions outside of Canada: Australia, Israel and the US are prime examples. Why these markets in particular and what are the plans for 2023?

I believe that one of the best things that Canada does as an economy is to provide public venture capital to early-stage companies. When we are looking at applying the services and skills we offer, we view, in particular, Israel, Australia and the United States as three dynamic places that support start-up companies. But in Israel and the United States, there isn’t a marketplace like the CSE that services early-stage companies with the focus that we bring to the table.

In the case of Australia, we have real interest from the mining community, especially with mining very much back on the minds of investors in North America. We can help Australian companies, that have maybe raised their preliminary capital in Australia, to access more of the global markets through a listing on the Canadian Securities Exchange. This makes them more accessible to investors in Canada, the United States and Europe. What we are looking for are dynamic economies generating lots of start-up companies, but where the companies are perhaps underserved by local markets in their effort to raise public capital.

The CSE has been working on a blockchain-based system for the clearing and settlement of tokenized securities. Where does the project stand and have recent developments outside the Exchange influenced your strategy?

We’ve made good progress on the technology. In fact, this summer we tested the full cycle of a trade with one of the dealers. That would be the trade, through clearing and settlement to all of the back-office processes that need to be completed in order to finalize a transaction. From that perspective, we have continued to make good progress.

It is fair to say that the crypto winter, or whatever you might call it, has influenced how we are thinking about this effort as we move forward. We have a lot of very credible people who are looking to tokenize securities to take advantage of some of the strengths of the technology, and we are continuing to work with regulators on a framework for that.

I think regulators will be conservative in their approach to tokenized securities in view of the situation with FTX and the knock-on impact on a number of participants in the crypto space. None of these, to be honest, are all that relevant to the traditional securities world, which is what we occupy. But, as I say, I believe it will make the regulators more conservative in terms of their approach with regard to thinking about some of the things that we are looking to achieve.

There are a number of job postings on the CSE website, mostly in customer support and regulation. What specific needs will the exchange be addressing with these hires?

A lot of the growth is taking place in our Vancouver office, and it is very much tied to the changes we are looking to implement in our listings policies. We have been working with the regulators and believe we are very close to coming to terms with the British Columbia Securities Commission and the Ontario Securities Commission on the approval of these policies.

The commissions are asking us to take on a larger role in overseeing a number of aspects regarding issuers listed on the exchange. For example, we will be launching a senior tier, which perhaps 80 to 100 companies will qualify for.

The way the regulations work, and exchange policies, is that these companies will be subject to closer scrutiny than the more junior companies. That is more labour intensive from the exchange’s perspective, and we have been staffing up to meet the obligations we are undertaking as a result of these policy changes.

The CSE team participated in several cannabis industry events in 2022, and you were recently named “Capital Markets Advocate of the Year” by the American Trade Association for Cannabis and Hemp. What is the exchange’s motivation to devote so many resources to the cannabis industry?  And what have you learnt about the cannabis industry that the market doesn’t know but needs to?

I think roughly 85% of the market capitalization on the exchange is in the cannabis space. They are our largest companies, our most mature companies, and they account for the vast majority of the revenues generated by companies on the CSE. So, it is a very important community for us to work with and to recognize and support.

There are also a significant number of private companies in the United States in the cannabis sector who don’t like the asset values being given in the public markets right now, especially in light of the decline in share price for many of the companies after Senator McConnell indicated that he was not going to support the SAFE Banking Act, which is liberalization of the rules around access to banking services for the cannabis industry. He suggested he would not be backing that during this session of Congress, and perhaps beyond.

In any event, there is a significant additional number of companies in the United States that we believe will be candidates for listing at some point, so we are trying to keep those relationships warm, even though valuations are not as attractive at the moment as they once were.

I will focus on some of the challenges the US cannabis industry faces in the capital markets. It is unique in the sense that, particularly for the US companies, about 97% of the shares are held by retail accounts. For a number of reasons, there is very little institutional participation in these names. For some it is because they are not listed on a national securities exchange in the United States, because their custodian refuses to keep shares of US cannabis companies in custody, because of volatility, or because they are operating in a state where cannabis is illegal. Many institutions have determined that it is not an investment they are prepared to make.

What that means is that there just isn’t the kind of long-term institutional holding of these shares, which I think has made them considerably more volatile, both up and down, than some of the other companies in their consumer-packaged goods peer group.

When people look at these big price swings, it is important to understand that this is not a Procter & Gamble or something along those lines, where you have a significant percentage of the stock held by institutions, fund managers or ETFs. This is all pretty much retail activity, and retail investors may not have the patience, investment horizon or approach that you would see from an institution. That’s fine, but people need to understand that the profile of these companies may be a little different when it comes to secondary market trading activity as a result.

Mining is another sector that is historically important to the CSE. In 2022, over 70 new mining companies have listed on the exchange. What makes the CSE such a good home for resource companies?

There are two things that I would highlight. The first one is that our team has a really good reputation with leaders in the entrepreneurial community, as well as the investment bankers and the accountants and the lawyers who service that community. We have surveyed these groups over the course of the year to get a better understanding of how they see us and our competitors. We see not only a high level of satisfaction, but a lot of repeat business from these professionals who have had a positive experience as they bring a company to market on the Canadian Securities Exchange.

That experience includes everything from the analysts reviewing files to our accountants. As one example, Francis Manns is an experienced consulting geologist who was extremely influential in the development of 43-101 reports for mining. He is now a resource at the CSE available to our issuers as they look to improve the quality of their public disclosure through technical documentation. He is a highly regarded individual and someone whom people in the industry look forward to working with.

The other piece is that our pricing is very amenable and responsive to the needs of the mining community. It is less expensive to list on the Canadian Securities Exchange than on other markets via IPOs and RTOs. We have long had a policy of providing cost certainty for companies. We are not looking to charge fees as a company raises money, for instance. We are not in the situation where we are nickel-and-diming our companies. They know at the start of the year what their budget is for maintaining a listing on the Canadian Securities Exchange and we stick to that. This is something the companies appreciate because they apply more of the money raised to advancing their projects, as opposed to putting it in the back pocket of the exchange where they happen to be listed.

I think the combination of those two things gives us a powerful leg up when it comes to attracting new business from the mining industry.

In October, the exchange launched the CSE2 trading venue. What exactly is CSE2 and what led you to launch a new venue in what appears to be a fairly crowded landscape?

This is a difficult question to answer quickly because it involves a grasp of evolving Canadian equity market structure. But I’ll give it a try.

An increasing number of brokers are providing zero-commission trading for their clients. People wonder how they get paid if they are not charging clients anything for the trading services they provide.

One of the ways is to monetize order flow from their clients. So, how do they do that?

Markets in Canada typically incent the provision of liquidity by providing a rebate to the party that posts an order that eventually trades. And they charge a higher fee to the party who accesses that liquidity by causing the trade to happen. It is known as “maker-taker” because one party makes the liquidity and the other party takes it. The maker gets a rebate and the taker is charged a fee.

All markets now have a second book which has an inverted price method in which the party who takes the liquidity receives the rebate and the party who posts the order is charged a fee. That way, the discount broker, let’s say, receives a rebate when they post a non-marketable order, and they receive a rebate in the inverted market when they trade against an order that is already there. That way they get rebates on their active orders and they get rebates on their passive orders.

Now, remember how important retail is to the Canadian Securities Exchange, and a lot of that order flow is coming from discount brokers that have reduced or eliminated trading charges over the last few years.

It is thus critical for us, if we are to maintain our price discovery role in the marketplace, to ensure that we continue to gather as many of the passive and active orders for companies listed on the CSE as we possibly we can. Yes, it is a crowded marketplace, but we are the listing exchange and we need to maintain that price discovery for determining the market value of securities at any given time. The alternative is to potentially lose that to marketplaces that are not having to absorb the expenses and regulatory responsibility to actually list the company. That is where we are coming from with CSE2.

One of the biggest developments slated for 2023 is the introduction of a CSE senior tier. How will this differentiate the exchange and what other activities are you planning to support this evolution?

There are really a few things, but I guess the first misconception I want to clear up is that this involves us somehow declaring war on other exchanges in Canada and making a pitch to a company like Royal Bank to delist from the Toronto Stock Exchange and come over to the CSE. It really isn’t that at all.

We have a number of companies on the CSE that would meet the admission criteria on senior exchanges in Canada. And we don’t want to be in a position where those companies are able to follow lesser standards of corporate governance, or longer periods to provide quarterly reporting to the marketplace as well as their annual audit results by virtue of the fact that they are listed on the CSE.

We are trying to put those companies on a level playing field with their peers that are listed on the other senior markets in Canada. We also, obviously, want to retain these companies. I sometimes speak about the Nasdaq back in the 1970s and the 1980s as one of our inspirations. They did such a good job working with Microsoft and Cisco and Oracle way back when they didn’t qualify for the New York Stock Exchange because they lacked tangible assets in the form of factories and steel mills and those sorts of things. All they had was intellectual property and engineers working to improve it.

When the New York Stock Exchange tried to attract Bill Gates and the rest of the senior leadership of the young tech companies in the United States, they told them they were not going to move because they’d had such a positive experience working with Nasdaq as public companies.

That’s the kind of approach we would like to take. We have worked with many companies that have succeeded and are growing. We want those companies to stay and continue to prosper on our marketplace and not go somewhere else simply because they qualify.

The other part is that we are interested in the opportunity to list ETFs and structured products. Looking at some of the other markets in Canada, they have robust structured product and ETF offerings that attract a lot of new listing activity. That is something that has not been available to us in years past, and we hope to open that capability and compete on a level playing field with other exchanges in Canada for that business. We think there are a number of products, such as a true cannabis ETF, that really do have a natural home on the Canadian Securities Exchange.

Let’s close on a look back and a look ahead. Talk to us about what it took to build the CSE to its current status, and what amongst your team’s accomplishments makes you the proudest. What should the financial community expect from the CSE over the next two or three years?

I’m going to work backward and start with the question about what to expect. The answer is not all that exciting, but I’d say to anticipate more of the same. That means the CSE grows quickly and we continue to be responsive to the needs of the corporate finance community in Canada, and particularly to entrepreneurs. That way, whatever industry sectors are receiving support from the investor community in Canada, we will be here to support them and provide them with fair, transparent and accessible trading markets for their securities. And then overlay that with the opportunity to compete for more structured products and ETFs.

What did it take for us to get here?  It is very much the team we built and the reputation it has earned through hard work and engagement with people across Canada, the United States and beyond. They achieve a very high level of customer satisfaction and repeat business – all of the indicators suggest that we will continue to be very competitive with our peers in bringing new companies to market, and really what it rests on is the people we have had around us for years. Our bench is deep and experienced. And we continue to add to it with people who are excited to join a group that did such a good job of building an exchange that is now a material part of the Canadian financial landscape.

There are not many other examples in the world of an alternative exchange like ours being successful and having the impact that it has had. I think that while all of us can take some pride in that, what we definitely can’t do now is to take it easy. It is still a very competitive landscape in Canada and beyond.

CSE Performance

Year-End 2021 Interview With Richard Carleton Part 2

Earlier this month, CSE CEO Richard Carleton sat down for an interview to recap an eventful 2021 and what is shaping up to be the CSE’s biggest year ever in 2022.

It is fair to say that the CSE is moving to a new level in the global exchange ecosystem – it’s like the next generation of the CSE. A senior issuer designation is part of this evolution. Can you update us on its status and the importance of the new designation, both to CSE issuers and the Exchange itself?

I think I should start by explaining that there is no such thing as an exchange designation being senior or junior. The way securities regulation works in Canada is that it is the companies that are characterized as being senior or venture issuers.

On December 9, we formally announced a project in the form of a request for comment published by the BC and Ontario securities commissions. What this entails is a significant rewrite to the listings rules of the Canadian Securities Exchange.

There are two major facets to the project. The first one is that we are updating our requirements for junior companies, both at the entry level and to continue to be listed on the Exchange. We have worked with our regulators over the last couple of years to revise these rules.

The second part, which is grabbing all of the headlines, is that we are creating a senior tier of the exchange. This is not a new exchange or separate trading facility, but a designation for a certain number of our issuers who have achieved a certain size and maturity in terms of the development of their business. Do they have revenue? Do they have significant assets? Is their sales trajectory rising? Do they have a significant market capitalization?

We’ve identified some 60 to 80 companies that would qualify to list on similar exchanges in Canada, and we’ve also seen a move by companies to dually list with Nasdaq this year. So, we are creating a rule framework that will regulate these companies, in effect as senior issuers.

The new framework will require these companies to have larger boards, bring more prescription around corporate governance procedures, plus set shorter timeframes to complete quarterly and audited annual financial reporting. There are also a few other measures that the companies will have to abide by, including more supervision of their continuous disclosure to the market.

In return, we believe there are multiple benefits for issuers designated as members of the senior tier. The first is that we have been working with IIROC to ensure these companies will be included on IIROC’s list of securities that are eligible for reduced margin when in dealer inventory. Right now, when dealers are holding CSE issuers in inventory, they have to take a charge against their regulatory capital of 100 cents on the dollar. Companies trading at more than $5.00 per share will only have to have a charge against regulatory capital of 20 cents, which is equivalent to that on other exchanges in Canada that serve as a senior company marketplace. It sounds technical, but it will have a practical impact on reducing the cost of capital for these companies when they are raising money.

We’re also working with international index providers to ensure that these companies are eligible for inclusion in different indices. For example, the US multi-state operators, which in many cases have market capitalizations in the billions of dollars, could qualify for inclusion in one of the MSCI or FTSE US indices. We have companies operating in Israel that would qualify for inclusion in the Israeli indices. We have been working with the index companies to provide for this capability.

We’ll also have, as part of the senior designation, the ability to list SPACs (Special Purpose Acquisition Companies), exchange traded funds, and structured products. And that’s important because we know that there are a number of ETF manufacturers that would like to launch products that are US cannabis-oriented, and they could launch those products on the CSE. There may not be much room left to run in the SPAC space, but we also know that there are some interesting structured products that are being developed, and we think we are the logical home for those instruments.

That is all part of the Exchange competition to come, where we will be working with the creators of these products to provide an appropriate home for their new listings.

Read Richard’s latest blog post here to learn more about issuer designations and the request for comments on the CSE’s proposal to revise its listing policies.

The senior designation is obviously going to be a very important development. Considering this, the impressive financing activity, the consistent growth in both institutional and retail investor participation, and other factors we have discussed, can you talk to us more about your views on the CSE’s evolving position within the broader global financial marketplace.

It is very much an evolution. We have been at this for 20 years and have the benefit of a very experienced team, whether it’s on the trading, market information, or listings regulation side, who understand at a very deep level what it takes to provide successful exchange services to the issuer, investor, and trading communities.

What it has really been is a series of efforts by us to eliminate all of the barriers and friction points for our issuers in the provision of those services. If I think back some years ago, we weren’t accessible by the online discount brokers in Canada. That was a huge issue that we devoted a great deal of time and energy to, and then five or six years ago, we managed to overcome that hurdle. Of course, that had a big impact on turnover, accessibility, and the appeal of a listing on the Canadian Securities Exchange.

Now that we have a cohort of larger, highly successful companies that have achieved a significant level of development in their lifecycle, we are looking at the friction points there. I talked about membership in international indices. We also need to improve access for international investors, one example being brokers who provide access to Canada for accounts in Europe, Asia, the Middle East, and other regions. We have to ensure they have access to these names.

There are institutional investors who claim they won’t invest in the small-cap space and have concluded that anything listed on the CSE is small-cap in nature. We have to work with these institutional investors to educate them about the success that many of our issuers have had, and the fact that they have attained market capitalizations in excess of a billion dollars in a number of cases.

At the end of the day, it’s a case of keeping our nose to the grindstone. It’s doing the hard work, making the trips, representing the issuers, identifying the hurdles, and developing plans to overcome those challenges.

It really sounds like 2022 is going to be one of the most important years in the CSE’s history. Let’s conclude with your thoughts on what companies listed on the CSE can anticipate in terms of service enhancements in the new year.

In the first part of the year, we are going to be working with the industry on completing the comment period for the new listings manual project. And in conjunction with that, we are going to be quite vocal across a variety of channels, explaining to people that we have succeeded with a number of very large companies, so the marketplace can expect some promotion and information related to that.

As our customer base grows and our regulatory obligations and connection with the framework for the senior issuers grows, we will be enhancing the teams who work with our issuers and their advisors, in our Toronto and Vancouver offices in particular. It is incredibly important that we continue to maintain our service levels, which is a really important part of what we do. I have received tremendous feedback over the years regarding both the personal service levels people feel they get at the Canadian Securities Exchange and the very positive problem-solving culture within our group. And we are certainly looking to maintain that as we continue to build out the team in order to provide high levels of service.

And I know we have talked about it for some years now, but we will see settlement and clearing services from the Canadian Securities Exchange in 2022. In fact, I have just come from a demonstration of the real, live system which is up and running in our testing environment. So, that is something I think will give us a significant advantage, in particular when we are working with the industry on listing structured products and taking advantage of the benefits of tokenizing their securities.

Obviously, there is lots going on. As we know, there is also motion in the global securities world. We’ve got Cboe Global Markets, which has acquired the NEO Exchange locally, and they will be closing that transaction at some point next year. And so that really leaves us as the only Canadian listing venue, along with the TMX Group, being locally owned and operated. That is an advantage we will be continuing to present to the industry in 2022.

Check out Part 1 of the interview here.

CSE Performance

Year-End 2021 Interview With Richard Carleton

Anyone keeping an eye on developments at the CSE over the past several years has watched the Exchange go from strength to strength, with the number of listed securities, capital raised by CSE-listed issuers, trading volume, and other performance measures climbing sequentially without interruption.

As exciting as the growth in CSE performance and services has been to date, the Exchange is preparing to take things to an entirely new level in 2022. Key to this is a senior designation for larger issuers who meet certain criteria. The new designation, and the regulatory framework that comes with it, also means that ETFs, SPACs, and structured products will be able to list on the CSE for the first time.

In an interview conducted in mid-December, CSE Chief Executive Officer Richard Carleton discussed these topics and more, giving issuers and investors a preview of what is shaping up to be the CSE’s biggest year ever.

Companies listed on the CSE have enjoyed an excellent response to their capital raising efforts in 2021, with a total of $7.74 billion in financings completed in the 12 months to the end of November. We have seen equity raises of all sizes, and debt is becoming more prominent as well; in October, Trulieve Cannabis successfully marketed US$350 million in senior notes. The listing environment at the CSE is designed to facilitate a low cost of capital for the Exchange’s issuers. As larger fundraisings take place, is that advantage being maintained?

There is a lot of ground to cover there, but I’d begin by saying that the Exchange exists to remove as much regulatory friction from the capital formation process as possible, so there are advantages for CSE-listed issuers generally when they are raising capital. As an example, we don’t charge issuers a percentage fee of the amount raised each and every time they do a secondary offering.

In large measure, the decrease in capital costs we’ve seen is also a function of changing dynamics, in that capital is being provided to large and successful companies, particularly in the US cannabis space. For instance, some of these companies were able to launch debt offerings because they now have substantial revenues to secure the debt against. As a result, they have seen the cost of capital from a debt perspective drop to levels which begin to reflect companies of similar size and growth trajectory in the consumer-packaged goods sector.

It’s thus a function of how we operate as an exchange, but also an indication of how capital providers view many of the companies listed on the CSE.

At the end of November, there were 736 listed securities on the CSE, which is 17% higher than at the same time last year. Talk to us about some of the trends you have observed in companies coming to market in 2021.

The first thing is that we are likely to achieve a record in terms of the number of new companies that join the Exchange this year. Right there, that tells you that the market is very robust for companies looking to raise capital to go public. One of the interesting things is that it has been very broadly based. We have many new themes that people have been interested in.

The sustainable food movement is a good example of a sector where a number of companies have tapped the public markets this year. Obviously, the psychedelics industry has also captured a good deal of investor attention. And then there are long-standing industries, such as mining, which is back in a big way, not only because of the robust nature of precious metals prices but also because investments are being made in various industries to advance the electrification of the economy, or decarbonization if you want to call it that. This has a significant impact on the mining space because the demand for the minerals used to produce batteries is extensive. And, of course, companies are also looking to shorten their supply chains, so investments in projects located within North America, for example, have been accelerated.

We have also had a continuing robust marketplace in the cannabis space. We have seen some new issuers in this sector join the Exchange this year and significant amounts of capital have been raised.

In addition, there has been tremendous investment in technology, which provides us with esports, gaming, and the decentralized finance companies related to blockchain. From my 30 odd years of experience in the capital markets, this is really one of the few times I can recall when virtually every industry sector is firing on all cylinders.

There is potential to challenge another listings record in 2022 and surpass this year’s total. This is a very exciting prospect for me, as it shows there is a high demand for our services.

Explain the role of retail investors in the market in 2021. What impact did they have on trading and liquidity?

In a word, huge. The junior capital markets in Canada are traditionally dominated by retail investors. Retail participants have always constituted an extremely important part of the investing and trading community that supports the work of the Canadian Securities Exchange.

It’s no secret that there was an absolute explosion of retail trading activity, particularly in the first quarter of 2021. We’ve set records in terms of daily number of shares traded, transactions, and value traded. By any measure, we are significantly above any kind of activity levels seen previously. And that growth has been principally driven by the expansion of activity from the retail space.

When we talk to our colleagues, and particularly those in the discount brokerage sector, we’re hearing that a whole new generation of investors has joined the marketplace, and really just since the beginning of the pandemic. These newcomers skew significantly younger than the traditional retail investor population who were in the 55 and up category in the past. We have seen lots of new accounts opened with significant participation from people in their 20s and 30s. These are people who are investing in the markets for the first time, and they bring a different viewpoint. They were enormously important in providing capital to the cannabis industry. They are very focused on issues around sustainability and environmental impact, diversity, and helping create a better world. They want to invest in company stories they believe in and that are helping to shape that better world.

There are a number of longer-term outcomes we will see because of this. Things such as ESG (Environmental, Social and Governance) reporting from companies, as well as companies having to pay a significant amount of attention when presenting their stories to where they sit in the world of impact investing. I think it is healthy, it’s positive, and it’s going to introduce some important changes to the way in which companies raise capital and communicate with their shareholders.

Check out Part 2 of the interview here.

CSE Performance, Industry Insights

Promoting a Level Playing Field for All Publicly Traded Companies in Canada

By Richard Carleton, CEO of the Canadian Securities Exchange

One of the very best aspects of the Canadian capital markets is our ability to provide funding to early-stage companies. With a successful history of financing mining and oil and gas exploration, the industry has applied its skills in more recent years to support innovation in a broad range of sectors such as technology and life sciences. This has resulted in notable recent success for companies in the legal cannabis sector. 

Canada is a world leader in the provision of capital to companies from around the world in these fast-growing new industries. Recent investment themes include the development of medical applications for the treatment of mental health issues with psychedelic compounds, and backing for the rise of cryptocurrencies and supporting technologies that are driving efficiencies in the payments sphere and the provision of financial services.  

As with any industry, competition in the provision of stock exchange services in Canada have benefited issuer companies and investors alike. 

The Canadian Securities Exchange (CSE) launched 18 years ago with a mission to provide public issuers with a streamlined, lower-cost alternative to the Toronto Stock Exchange and TSX Venture Exchange. We succeeded. The CSE is now home to more than 700 active listings and has attracted more global issuers of greater size and maturity over the last few years than at any other point in its history. 

Greater competition, including other new exchanges launched after the CSE, has clearly benefited Canada’s investment community, as well as the companies and investors that it serves.

That said, we can and should be doing a much better job of enabling competition in the provision of exchange services to companies, brokers, and investors. Here are a few examples of the challenges faced by new entrants, and some potential solutions. 

Market Data

In the United States, an industry consortium collects and processes real-time market information from the stock exchanges and then provides access to the data for all the securities listed on each exchange (Nasdaq, NYSE and NYSE American) for a single fee. In other words, regardless of where a particular security trades, and at last count there were 16 venues, an interested investor can “see” every trade and current quotation. 

This is not the case in Canada. In an environment where almost half of the trading in TSX and TSX Venture Exchange stocks occurs on different marketplaces, investors are forced to deal with the venues individually to see the full picture. Many people, who either don’t understand our convoluted market structure, or do not want to pay these separate fees, opt to take the data from the incumbent exchange only. This leads to a series of issues:  

  • When trading is disrupted for any reason on the TMX Group exchanges, Canadian liquidity dries up precipitously. In the United States, when the major exchanges have technical issues, the other markets pick up the slack without missing a beat. Canadian markets are not nearly as resilient as they could be.
  • With large segments of the industry not having access to meaningful market data, and this group includes the professional retail advisors at the national investment dealers, the lack of transparency does little to enhance confidence in the functioning of Canada’s stock markets. People naturally assume that if they can’t see trading activity, that something unwholesome is going on. This lack of transparency breeds a lack of confidence in the operation of the markets.               

Index Membership

I again refer to the experience of exchange competition in the United States. The tech giants we now know so well were essentially forced to go public on Nasdaq, because NYSE’s listings qualification rules during the 1970s and 80s required a company to have significant tangible assets. In other words, the exchange didn’t give credit to the important intellectual property assets held by the rising technology sector. 

This subtle form of discrimination extended to membership in the benchmark US indices such as the S&P 500 and the Dow Jones Industrial Average: companies were required to be listed on the NYSE to be eligible for inclusion in these indices. It took many years of pressure from users of the indices to spur the index providers into changing their criteria. 

We find ourselves in the same situation in Canada years later. The S&P/TSX indices, with hundreds of billions of investment dollars measured against these benchmarks, require a listing on one of the TMX Group exchanges for a company to be eligible for inclusion. 

This has distorted the market in a variety of ways: companies that have grown to a size warranting consideration for inclusion in one of the S&P/TSX indices have left, unwillingly, a competitor exchange to move to the Toronto Stock Exchange. Make no mistake, the possibility of index membership is attractive to prospective listed companies. 

Eliminating the requirement that a company be listed on a TMX Group exchange in order to be included in one of Canada’s benchmark indices will enhance competition in our space.        

The Peculiar Meaning of “Venture Issuer”

This issue is perhaps the most subtle, yet wide ranging barrier to better competition in the stock exchange industry. Let me start with a bit of background. To promote a framework where it is cost effective for small companies to go public, regulators have created two sets of requirements for public companies: those set out in the provincial securities acts with rules for governance and reporting for larger, more mature companies, and a less prescriptive set of rules designed for so-called “Venture Issuers.” 

Unfortunately, instead of identifying which public companies are “Venture Issuers” based on objective measures like market capitalization, revenues, assets or other objective measures, the framework instead defines them as issuers listed on the TSX Venture Exchange and the Canadian Securities Exchange. 

This system worked reasonably well during the early stages of exchange competition in Canada. When smaller public companies reached a certain level of success on the TSX-V or CSE, they would typically move their listing to the TSX or a US exchange. At that point, they would shed the “Venture” label and be re-classified as “Issuers” for the purposes of their disclosure and governance rules. 

This labelling is extremely important because “Issuers” and “Venture Issuers” are not treated equally in the investment ecosystem:

  • CSE-listed “Venture Issuers” are not eligible for margin relief under the rules of the Investment Industry Regulatory Organization of Canada. This means that CSE-listed companies are not permissible in client margin accounts; securities of these issuers in dealer inventory are carried at full value against the firm’s regulatory capital. This measure increases the cost of financing for these issuers and can keep some dealers out of the space altogether.
  • Investment mandates from institutional investors may not permit these asset managers to purchase the securities of “Venture Issuers,” narrowing the range of capital available for promising early-stage companies and even some larger issuers listed on the “wrong” exchange.
  • Some international index providers will not consider “Venture Issuers” for inclusion in their indices, denying companies exposure to investors and frustrating a company’s attempts to increase the range of investors in their company’s securities.

Thanks to the CSE’s recent success in attracting and retaining larger issuers, particularly in the global cannabis sector, the “normal” evolution of successful companies jumping from the CSE to the TSX has broken down. The CSE is now established as a credible home for larger, more advanced companies, which are using their CSE listings to raise serious amounts of money. The total capital raised by CSE issuers last year exceeded $6 billion, compared to about $0.5 billion in 2016. Last year’s total has already been exceeded this year. Liquidity measures also show the CSE in a superior light to the TSX-V and NEO exchanges and have exceeded the measures produced by the TSX itself for significant periods of time over the last few years.

While we are delighted that larger issuers are choosing to make the CSE their home over the longer term, the “Venture Issuer” status has become a real problem. These larger CSE-listed companies, some of which have market capitalizations in the billions of dollars, are at a significant disadvantage to comparable companies on rival exchanges that are eligible for margin relief and the other benefits I outlined above.

We could wait for the various regulators to address the competitive imbalance, but true to our nature as disruptors in the marketplace, we are tackling these problems head on. 

We are in the long process of rewriting our listing policies to create two tracks for companies listed on the CSE: one for “Venture Issuers” and another for more mature companies. Under the new rules most companies will remain “Venture Issuers.” The larger and more advanced companies will, however, get reclassified, allowing them to (hopefully) enjoy the same benefits as “Issuers” on the TSX. Accordingly, they will be formally subject to a more prescriptive corporate governance regime that mirrors the policies set out for existing “Issuers” under securities law and related exchange rules.

We have worked hard with regulators to formulate this revision of our listing policies and have published the proposed changes for public comment here: https://thecse.com/en/about/publications/notices/notice-2021-005-request-for-comments-proposed-policy-amendments 

The entire investment community should support our proposal. It is simply a matter of fairness and common sense. By addressing regulations that should have been dealt with years ago, we can enhance the competitive landscape for issuers and investors in Canada and ensure a strong and vibrant capital formation ecosystem well into the future.

CSE Performance, Industry Insights

Richard Carleton’s Interview with Highly Capitalized

CEO Richard Carleton was pleased to sit down with Greg Hasty from Highly Capitalized during MJBizCon Las Vegas to discuss the CSE’s position in the global cannabis space, how the industry as a whole is maturing, as well as M&A activity and brand building among US cannabis MSOs. Read the transcript of the interview below. 

Greg Hasty:

Hey everyone. Welcome back to our continuous coverage of MJBizCon 2021. I’m Greg Hasty here in downtown LA at the HCN studios. And I have the pleasure of being joined by Richard Carleton, the CEO of the Canadian Securities Exchange. Richard, how are you doing?

Richard Carleton:

I’m doing well. Thanks Greg. Pleasure to be back at MJBiz in Las Vegas after a couple of years off.

Greg Hasty:

Absolutely. I’m very jealous. I’m already envious of you being on the floor while I’m stuck back here in the studio in LA, but great to see you again. Great to connect with you again. 

Lots of changes, lots to talk about since the pandemic hit, but not all of them negative. Some really, really good developments in cannabis and adjacent markets. Tell us a little bit about what’s exciting you. What are you pumped about coming out of 2021?

Richard Carleton:

I think for people who don’t know who the Canadian Securities Exchange is, just a bit of a backstory, we made the fateful decision about five years ago to not just list companies from Canada in the cannabis space, but to begin to work with the industry in the US as well. And we really became the partner for the US multi-state operators to access public capital in Canada, and the United States as well. And all of the significant MSO operators who are public now are listed on the Canadian Securities Exchange. 

We have roughly 160 odd companies in the cannabis space on the exchange overall. And it’s a significant percentage of our market capitalization, and daily trading turnover. From that strength, we have levered that position in the industry to work with companies from Latin America, South America, the Middle East, in particular, Israel, as well as Asia.

So we’ve really achieved a lot for a small Canadian startup. We’re now 20 years old, in a significant position in the cannabis finance space globally. So it’s been a wild ride up to the pandemic. And of course, we all had some uncertainty in the early days. And broader markets were certainly under extreme stress. But then by June, things had recovered dramatically, not just in the broader market, but in the cannabis market specifically when it became obvious that consumers were in fact rotating their purchases in the cannabis space and really supporting the industry in a big way. 

And so, as the companies reported ever-improving results in Canada and the United States, increasing sales and moving towards profitability, that’s opened up a whole new range of opportunities for these companies to raise more capital and to begin to think about planting the flag in new states and new jurisdictions, and expanding their businesses organically.

Greg Hasty:

Absolutely. And I just love the journey that you’ve been on. I’ve been following you for at least six or seven years now and I remember even in my earliest interviews, people talking about getting involved with the CSE and how the CSE is really helping them get out there. And you really were the launchpad organization for so many businesses in the US, let alone businesses in Canada itself. 

So talk to me a little bit about the current state of MSOs and Canadian businesses as well. There’s a lot of activity. M&A is a big thing right now. Tell us about the market shift and what trends you’re seeing.

Richard Carleton:

I think the important driver across the board here is a decreasing cost of capital for the large Canadian LPs and the US multi-state operators, with the number of opportunities that are opening up in new jurisdictions in the United States. We obviously have the tri-state area on the east coast. Michigan is obviously developing jurisdiction, Pennsylvania’s developing, maybe Ohio at some point in the not too distant future. They’re even talking about medical in Texas. 

So there’s still tremendous opportunities for growth in the US markets, specifically. All told, I think it’s about a hundred billion a year between the illicit and the legal markets in the US now. So we know that there’s an enormous addressable opportunity for the operators to take advantage of, and they are. What we have seen is that companies from the US space, through the CSE, have raised more than $4 billion on a year-to-date basis.

That money is pretty much earmarked for mergers and acquisitions activity, as well as to build out in some of the states where they’re currently already operating. And again, there’s a significant cost of capital advantage. We’ve seen debt capital raised by a number of these companies that are now down in the single digits from a coupon perspective. 

A year or two ago, companies were looking at 15% interest on debt. We saw last week an issuer raised debt at a 7% coupon. And the difference, of course, is that they have cash flows to secure that debt financing against, and so, the cost of capital has come down. They will use those advantages, as I say, to be very active in mergers and acquisitions activity, and they will continue to expand their footprint in the United States in particular.

Greg Hasty:

Do you see any difference in how MSOs are approaching M&A activity compared to what they were doing pre-pandemic? We saw a lot of MSOs build themselves up. And sometimes, it was a little “cart before the horse” in a lot of cases, and sometimes they would tackle almost too much in activity. 

Are you finding that these MSOs that you’re working with and have partnerships with are being a little bit more strategic in their approaches? What’s kind of top of mind for them right now when they’re looking at different M&A opportunities?

Richard Carleton:

I think we understand well now where the value in the chain is highest. With cultivation assets, I think this is what you were saying was a big focus of investment in the early stages. And we now see over-capacity in a variety of regions in the United States, particularly California. Clearly that’s not going to be a source of margin for these companies moving forward. 

It’s all about building brands, rationalizing your supply chain, and getting more and more product on the shelves, whether you own the dispensary, or through license agreements or agreements with recognized retailers, to get your high margin products in the hands of consumers. And I think that’s a sign of the increasing maturity of the industry, and understanding where future revenue and margin growth is going to come from.

Greg Hasty:

I’m personally really excited by that as a marketing and branding guy, to see people focus on consumer experience, on brand loyalty, on proper brand stewardship in cannabis, and not just cannabis-adjacent markets. You have psychedelics that are coming online. You even have technology companies that are now focused on the consumer experience and quality and stuff like that. So it’s really nice to see that maturity come into the industry, and it sounds like it’s just going to be more and more of a benefit for our partners moving forward.

Richard Carleton:

That’s absolutely right. And when we look at, for example, the Canadian LPs, they have real challenges in building brands because of the marketing and advertising restrictions that are placed on those companies. 

That’s actually why you see the Canadian LPs wanting to invest into the US business lines, because that is where you’re able to develop those brands, and build consumer loyalty. Because again, this isn’t really the same as any other consumer packaged goods where you’re trying to build a brand from scratch because you know there’s an addressable market. You’re trying to win back share from the illicit market. 

And so to do that, to command a bigger and bigger share of that brand loyalty and a successful consumer experience, it’s obviously going to be absolutely critical in winning that share.

Greg Hasty:

Wonderful. Well, Richard, I really appreciate your time. I love chatting with you. We can go so much deeper in the flow of the markets, but what’s wonderful about cannabis is that it’s always exciting and there’s always something going on. So every time we talk it’s a new and amazing adventure.

But that being said, the trend of maturity keeps going. Seeing these markets come online stronger, seeing these companies come back stronger is such an exciting thing. But thank you again, Richard, I love the chance to talk with you, and I hope you enjoy your time on the floor. Always make sure to check out the Canadian Securities Exchange on their website, and Richard, I believe you also have CSE TV, which is your social media outlet, correct?

Richard Carleton:

That’s correct. That’s our YouTube channel. We encourage everybody to subscribe. Through the pandemic, we’ve been doing a lot of our shareholder and company education through the medium of YouTube, as well as LinkedIn and Twitter and Facebook and so on. But we really like YouTube. 

Greg Hasty:

Beautiful. So make sure to go on YouTube, check out CSE TV. Really great quality content. And they’ve really put in the work, especially over the pandemic. Richard, thank you again. It was great to see you. Make sure to also check us out on highlycapitalized.com to stay up to date on today’s events and all the interviews you may have missed, as well as the upcoming interviews. And make sure to follow us on LinkedIn and Facebook to stay up to date on our broader services. We’ll be right back. Stay tuned. See you for the next interview.

Richard Carleton:

Thank you.

 

To watch the full video interview, click here.