CSE’s Barrington Miller and 17 Issuers Featured in High Times Magazine

The cannabis industry continues to prove not only is it budding, it’s in a full-blown growth spurt. 

As one of North America’s fastest-growing industries, it’s important to monitor trends, legislation, and key players, and there’s no publication more on the pulse than High Times magazine, a top resource for the latest cannabis information since 1974.

Every year, High Times releases a list of the 100 most influential figures in the cannabis space. In April, they released The High Times 100 of 2021, and, excitedly, CSE Director of Listed Company Services, Barrington Miller, was featured, as well as 17 CSE-listed issuers. 

The CSE couldn’t be more proud of Barrington and these incredible cannabis entrepreneurs! It’s an impressive accomplishment and reaffirms the CSE’s reputation as a best-in-class marketplace for publicly traded cannabis stocks.

“It’s amazing to be recognized alongside these cannabis companies, professionals, and advocates. The CSE is proud of our contribution to the sector and we’re thankful to not only our issuers, but to everyone who is uplifting the industry. Special thanks to High Times for continuing to blaze that trail,” said CSE’s Barrington Miller. 

Check out the executives from the CSE-listed companies featured:

  • Leo Gontmakher, CEO of 4Front Ventures (CSE:FFNT)
  • Abner Kurtin, Founder and CEO of Ascend Wellness Holdings (CSE:AAWH.U)
  • Andy DeFrancesco, Former Chairman & CEO of SOL Global Investments (CSE:SOL)
  • Jason Wild, Chairman of TerrAscend (CSE:TER)
  • Kim Rivers, CEO of Trulieve Cannabis (CSE:TRUL)
  • George Archos, CEO, and Sam Dorf, Former Chief Growth Officer of Verano Holdings (CSE:VRNO
  • Daniel Carcillo, Founder and CEO of Wesana Health Holdings (CSE:WESA)
  • Robert Beasley, CEO of Cansortium (CSE:TIUM.U)
  • Nicholas Vita, CEO of Columbia Care (CSE:CCHW)
  • Charlie Bachtell, Founder and CEO of Cresco Labs (CSE:CL
  • Jonathan Sandelman, Chairman and CEO Ayr Wellness (CSE:AYR.A)
  • Joe Bayern, CEO of Curaleaf Holdings (CSE:CURA)
  • Matt Stang, Co-Founder and CEO of Delic Holdings (CSE:DELC)
  • Ben Kovler, Founder, Chairman, and CEO of Green Thumb Industries (CSE:GTII)
  • Jim Cacioppo, Founder, Chairman, and CEO of Jushi Holdings (CSE:JUSH)
  • Robert Groesbeck, Co-CEO of Planet 13 Holdings (CSE:PLTH)
  • Brad Rogers, CEO of Red White & Bloom Brands (CSE:RWB)

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.

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.

How to Improve Your Recruiting Through Analytics

We are living in an age of big data and analytics.  It has never been easier to collect and analyze information to optimize your organization’s business processes.  Recruiting is no exception.  Doing this will not only offer you fresh insights into how successful your existing recruitment efforts are but also provide clarity on how to make them more efficient to achieve better results.

Establishing and using analytics is a great way to figure out how to make your recruitment efforts as effective as possible. You can uncover that you’re spending hundreds or even thousands on resources that are not leading to the desired candidate pools where you wind up hiring from. Smart organizations leverage HR technology to gather the proper data points required for c-suite decisions for funds allocation and business process effectiveness.

There are lots of ways to capture data about your recruiting process. One of the easiest is to use an applicant tracking system that will automatically collect that data for you and display it back in an easy-to-understand dashboard. But, no matter how you collect your recruiting data, make sure that you focus in on a few key metrics:

Time to hire – is the amount of time to it takes from when a job is posted until a candidate accepts your job offer.  While time to hire can vary dramatically depending on the industry you are in and the role you’re recruiting for, the longer the procedure takes, the more expensive it becomes.

Cost to hire – is how much it costs to fill a position, to calculate this you factor in advertising the position on paid job boards, paying for various other tools, and time spent on recruiting, vetting, and onboarding candidates.

Source quality – is the cost-effectiveness of the different sources you’re using to attract candidates. An easy way to calculate this is to divide the cost of each source (job boards, ads, etc.) by the number of successful hires for the desired time frame in question (quarterly, annually).

Together, these metrics will give you a fantastic initial understanding of how efficient and cost-effective your recruiting is.  Once you’ve established some benchmarks for yourself or your recruiting partner like TPD, (i.e., how long it typically takes you to fulfill a job, how much doing so typically costs on average, and how cost-effective your distinct sources are), you can then get to work to optimize your recruiting efforts to get better results.  When you have clarity through attribution analytics on your top candidate sources by job type, you can effectively build a case to increase ad budget for that job board platform and reduce spending on underperforming job boards.

There are many ways to leverage applicant tracking systems during the recruiting and onboarding. When done right this pivotal step in candidate experience becomes the stepping stone for your employer brand and the start of your new hire’s journey with you. TPD provides end to end solutions for organizations looking to improve their recruiting process internally or take over the entire function with total transparency into all of the analytics mentioned.

Anytime that you have data-driven analytics and metrics, you can use them to gain insights into everything you’re doing.  If your time to employ is long and your cost per hire is low, then you should make some tweaks to your procedure, such as spending a bit more on advertising.  A small investment can easily pay for itself if you are getting to better candidates faster, but you need to know your numbers to justify the action.

It may not be easy, but using analytics is a great way to figure out how to make your recruiting efforts as efficient as possible. For that reason alone, it’s worth taking a closer look at them.

About TPD

TPD® is an international Workforce and HR Solutions company that partners with our clients and talent pool to help people succeed and help organizations perform. Founded in 1980, TPD works with people, for people, and about people; providing scalable HR solutions that are backed by the best-proven practices in the industry.

Are You Protected Against Cyber Security Attacks?

No one thinks it’s going to be them. Until it is.

According to the movies, cybercriminals operate out of abandoned warehouses, target carefully selected conglomerates and use things like “worms” and “keys” to gain access. The reality, however, is that cybercriminals, using scattergun techniques like phishing, are not out for world domination but rather a more familiar motive: money.

In 2016, 24% of breaches targeted financial organizations, 15% healthcare, 12% public sector entities and 15% targeted retail and accommodations*. Whether it’s design plans, medical records or good, old-fashioned payment card details—someone, somewhere will see it as their meal ticket.

Organizations need to build a strong security posture by implementing strategies that address internal and external threats across the entire chain. It is critical to start from the premise that systems will be breached. This perspective enhances the effectiveness of decision making related to preventing, mitigating and recovering from a breach.

Another recent development makes this a pressing imperative. Canada’s new Digital Privacy Act has introduced mandatory breach notification.  In 2017 organizations will be required to notify the Office of the Privacy Commissioner, as well as the individuals affected, if the organization experiences the loss or theft of personal identifiable information that puts these people at “real risk of significant harm.” Failing to do so could result in fines of up to $100,000 per offence. This comes as part The Digital Privacy Act (formerly referred to as Bill S-4) that was put into effect in June 2015.

On January 19, 2017, the Canadian Securities Administrators (CSA) published Multilateral Staff Notice 11-332, stating that they expect issuers to provide risk disclosure that is as detailed and entity specific as possible, should they determine that a cyber security risk is a material risk. In order to determine materiality, the cyber security incident requires analyzing and the probability of a breach occurring and the anticipated magnitude of its effect needs to be determined. The CSA expects issuers to disclose specific risks, rather than generic risks common to all issuers, and they expect issuers to tailor their disclosure of cyber security risks to the particular circumstance. Underestimating risks leaves enterprises highly vulnerable. Poor security can lead to painful, even catastrophic, financial and reputational losses. Moreover, data breaches and other security incidents put not just individual companies, but entire supply chains, at risk. The following are three steps to build a robust security posture that will support the goals and resilience of your organization, and assist you in determining your cyber security risk.

  1. Conduct a health check of your organization’s cyber security maturity.

A health check is an assessment of an organization’s controls, security risks and threats, to define its current security posture and highlight gaps.

The health check assesses current risks to your industry and business and evaluates the strengths and weaknesses of your organization’s existing security controls.

The health check determines the impact a breach could have on your organization: operations, productivity, information assets, infrastructure, reputation, materiality of the cyber security risks and brand.

  1. Develop a clear security roadmap.

The health check will guide an organization by providing a clear map of priority risks and practical direction regarding where to most effectively focus cyber security budget and resources.

  1. Test your organization’s vulnerability to cyber-attack.

It’s essential to supplement planning with robust testing to determine your organization’s vulnerability to cyber breaches. Intellectual property, personal information, plant systems, computer servers, and mobile devices, could all be targets for attacks.

Seek objective, trusted third party cyber security expertise to assess potential weaknesses through vulnerability assessments and penetration testing of your internal and external networks and applications.

Without adequate protection, cyber security threats can put your organizations’ operations, reputation – even its existence – at risk. Vigilant assessment, planning and testing are critical to protect the bottom line.

For more information on how you can better protect your business from cyber-attacks, contact: Danny Timmins, CISSP, National Cyber Security Leader T: 905.607.9777 E: [email protected]

About MNP

MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world.


  • 2017 Verizon Data Breach Investigations Report
  • Canadian Securities Administrators Multilateral Staff Notice 51-347 – Disclosure of cyber security risks and incidents
  • Canadian Parliament: Digital Privacy Act (Bill S-4)
  • Government of Canada: For Discussion — Data Breach Notification and Reporting Regulations

Webinar: Trends & Directions in the Cannabis Industry

On May 23rd, the CSE hosted a special webinar event featuring Tom Adams, managing director and principal analyst of the investment research and consulting division at BDS Analytics as well as editor-in-chief of Arcview Market Research.

The webinar dissects the cannabis industry, and with BDS Analytics’ impressive data collection of more than 250,000,000 processed and analyzed legal cannabis transactions, provides valuable insights into a rapidly growing industry.

In his presentation, Tom showcases the market’s current data, trends and opportunities and what it all means for investors. Tune in to see his detailed market forecasts and the possible direction BDS sees the cannabis industry heading in.

To view the webinar in its entirety, click here.

Cannabis industry webinar with Tom Adams - BDS Analytics


Transformation of CSE’s Trading Services – CSE Response to Dealer Challenges

Richard Carleton, CEO

The Canadian Securities Exchange (“CSE”) is transforming its trading services.  First, with the implementation of a new trading technology platform completed in December last year, the CSE has addressed previously noted latency and performance issues.  The new system has exceeded CSE’s expectations for the project and has been favourably received by clients.  Second, the CSE is introducing new trading features and functionality designed to address issues facing the dealer community in Canada.

Challenges faced by participant dealers

In our view, the biggest challenge facing participant dealers is cost effective execution of agency orders.

The advent of multiple market trading and the rise of the “maker/taker” pricing model have attracted numerous liquidity providers to the Canadian markets.  With liquidity incentives that were several times more generous (on a value traded basis) than US market centres, competing trading firms (often supported with sophisticated computer technology) reduced quoted spreads for actively traded instruments to the minimum increment.

Although the narrower spreads served to benefit clients trading in high turnover stocks, the cost to access the liquidity for their executing firms began to approach prohibitive levels.  These costs include, but are not limited to, exorbitant take fees, multiple ticket charges resulting from smaller average execution size, implementation and maintenance costs for order routers (for compliance and best execution purposes), access fees and market data charges for a burgeoning number of new venues, gaming strategies employed by the liquidity providers, a rising percentage of odd lot orders, and significantly increased compliance risk.  All of these factors have combined to increase dramatically the costs of execution for agency dealers.

CSE addressing the challenges

The CSE has introduced a series of measures designed to address the aforementioned challenges and is adding further functionality and features:

  • a market making programme for all stocks trading on the CSE (CSE, TSX and TSX-V-listed) was introduced in November, 2014. The key feature of the programme is that it provides automated execution for eligible agency orders up to the “guaranteed minimum fill” commitment from the market maker.  We currently have a number of firms providing odd lot and full market making services for both CSE and other market listed stocks.
  • The CSE filed for an enhancement to the GMF programme on February 17, 2017. The proposal, which may be published in the OSC Bulletin for public comment as early as March 2, is intended to increase the opportunity for GMF-eligible orders to be automatically executed at the prevailing national best bid or offer in a single trade ticket.
  • The CSE is also revising its fee schedule. The changes are intended to reduce overall execution costs for agency dealers.
  • The CSE received approval from the Ontario Securities Commission for the introduction of two new features on February 16, 2017. A copy of the OSC notice may be found at:  http://osc.gov.on.ca/en/Marketplaces_cnsx_20170216_market-maker.htm . The first component of the filing, the introduction of standard peg order types, did not attract any comments.  The second component of the filing, the introduction of market maker participation, was somewhat more controversial.  We will spend some time describing how we believe the feature should be eventually implemented, and how it is currently approved.

It is an unfortunate fact of the public comment process in Canada that the conversation with respect to securities regulation, at least from a practitioner viewpoint, is dominated by the institutional trading desks.

In the United States, there are a number of powerful and independent advocates for the interests of retail oriented investors: large mutual fund firms, independent discount brokers and regional brokers servicing a retail investor population.  All intervene on behalf of the interests of their clients.  These entities either do not exist in Canada (the independent discount brokers are all relatively small compared to their bank-owned competitors), or have elected for one reason or another not to take an active role in the policy formation processes.  Consequently, it has been a challenge for the CSE to rally broader public support for enhancements to its offerings for agency clients.

It is also a difficult process to appropriately balance, in a way that satisfies all of the stakeholders in the market, the privileges afforded a market maker with the obligations that they are providing to the marketplace. In our experience, any offering from a marketplace that increases the likelihood of execution of an agency order against the market maker’s book, is more likely than not to be opposed by parties looking to increase their ability to trade against these orders in the open market.

Under the CSE’s original proposal, market makers would have been entitled to participate against up to 40% of the volume of eligible marketable orders.  The current guaranteed fill requirements would remain in effect, such that if the booked volume at the bid or the offer was insufficient to satisfy an in-bound order, there is no elective participation. The market maker is obligated to fill the remaining volume. This restriction to trading with only eligible orders was the most problematic for commenters and the regulators.  Since the market maker was not “obligated” to participate with “all order flow”, the feature was characterized as a “benefit” to the market maker.  The fact that the feature would result in reduced costs and superior execution quality for agency clients and their executing dealer, was not, in our opinion, given sufficient consideration.  As a result, the CSE’s original proposal would not have been approved.

In order to avoid undue delays in delivering the other features that have already been approved, the CSE has determined to deliver a modified version of the participation programme. As set out in the OSC Notice, the CSE participation programme will now allow the market maker to interact with all orders less than the GMF and would limit market maker participation to a maximum of 40% of the GMF commitment.  These features are consistent with market maker participation available on other exchanges in Canada.

Although this is an imperfect result, we will be working to overcome the objections of a subset of the trading community as well as engaging with OSC Staff in the coming weeks.  Our objective is to provide Canadian dealers with a cost effective means of executing large volumes of client orders, while providing appropriate guarantees of both best price and best execution for their clients.  These goals are clearly in the best interest of the public and the market as a whole.


Richard Carleton

Chief Executive Officer

Market Structure Issues Affecting Small‐Cap Issuers: CSE Submits Comments to IIROC

As part of a number of initiatives undertaken this year  to enhance the stability and integrity of Canadian capital markets, the Investment Industry Regulatory Organization of Canada (IIROC) sought comments from capital markets stakeholders on factors impacting micro and small-cap issuers.

With well over 300 publicly listed small-cap securities, the Canadian Securities Exchange (CSE) serves as an important bellwether for forces impacting this vital segment of the securities ecosystem. As such, the CSE provided its perspectives on a number of regulatory as well as operational items that could provide direction on improving capital formation for stakeholders in the micro and small-cap space.

Below is the full text of the letter submitted to IIROC detailing the CSE’s comments. All submissions, when published, will be available on IIROC’s website.


The Canadian Securities Exchange (the “CSE”) is pleased to submit its observations and recommendations in response to the Investment Industry Regulatory Organization of Canada’s (“IIROC”) request for proposals on “Market Structure Issues Affecting Small‐Cap Issuers”.

The CSE’s view is that many of the market structure concerns voiced by small‐cap market participants over the last number of years are symptoms of a fundamental problem: an absence of buyer interest and participation in these markets. Some of the reasons for this challenge are beyond the control of industry participants. The collapse in the price of many commodities during the current business cycle, and unfavourable demographic trends in the retail investment population who have historically participated in these markets are a big part of the challenges faced by issuers, advisors and marketplace operators in the small‐cap space. The CSE believes, however, that there are a number of measures that can be adopted by the industry to address issues under our control. These measures fall into two broad categories:

  • Address the capital formation challenges faced by issuers and their advisors, and reduced participation rates from retail investors in initial finance transactions. The exempt market in Canada should be enhanced with measures similar to those now in force in the United States as a result of the implementation of Regulation A+ of the JOBS Act. Doing so would provide a bridge between the attempts to create a crowdfunding regime for very early stage capital raises and the traditional prospectus‐backed IPO market. The current exempt market, which provides the majority of small‐cap finance, is by its nature limited in scope in both the dollars that can be invested and the number of potential participants. The CSE believes that many of the market structure mechanisms proposed will not provide any long term relief to the problems identified, unless the buyer problem is addressed. Unless new classes of market participants are able to enter the small‐cap finance and trading space, we are concerned that technical changes to the trading rules will not bring about the anticipated benefits.
  • In the second part of our submission, the CSE will provide its views on many of the issues raised by industry participants and cited by IIROC in the Request for Proposal.

Importance of Canada’s Small‐Cap Finance Community

It bears repeating that Canada’s early stage public capital market is an important component of the country’s economic success. Entrepreneurs from every industry group have benefited from their ability to finance business development from the public markets at a lower capital cost than would be available from private sources. Where businesses in other countries have to rely on expensive and restrictive private sources of finance (e.g. bank debt, private equity, venture capital funds), Canadian companies have been able to raise billions of dollars at reasonable cost from public market investors. Canada’s investment dealers and marketplace operators have supported this primary capital formation process with fair, efficient and accessible secondary market trading services. Investors from all income brackets have historically been able to share in the growth of the country’s capital markets through their ability to buy and sell small‐cap stocks. The liquidity, and resulting price discovery efficiencies, that these investors contribute to the market has further supported the ability of companies to raise needed capital from the public markets. Unfortunately, the traditional primary and secondary market model for small‐cap finance in Canada has broken down. The days of an IIROC member investment dealer advising a company and assisting on the placement of its initial distribution of securities under an offering document, while supporting secondary market interest through the provision of research coverage and investment advice via a network of advisers are irretrievably past. The vast majority of funding raised by companies listed on the CSE and the TSX‐V now comes from the exempt market. Advisors at IIROC member investment dealers are increasingly less likely to recommend client participation in both primary and secondary market small-cap investment. Secondary market trading activity comes principally from retail investors through the discount brokerage networks. Dealers are committing less and less capital to market making and other proprietary secondary market trading activities. While we will leave it to the practitioners from the sell side to enumerate the reasons for the shift, we do not believe that any of these trends are positive for the Canadian capital markets.

In current small‐cap finance, the principal source of exempt market funds is the accredited investor exemption. Covering a minute percentage of Canadian households (approximately 1 – 2%), accredited investors account for a major percentage of funds raised by CSE issuers. The CSE believes that to address the capital formation challenges faced by small‐cap issuers, access to the exempt market should be expanded. At the same time, the industry needs to collectively come to an agreement as to the role that new forms of investor engagement can and should play in the capital formation process. Many registrant firms, citing compliance concerns, will not permit their advisors to use social media to communicate with clients and a broader investor audience. Small‐cap issuer firms and their advisors are also reluctant to employ social media for similar reasons. Given that an entire generation of potential market participants consume news and information via social media sources, the industry is cutting itself off from the future. Accredited investors skew older than the population as a whole (which is itself aging rapidly), and ultimately represent a declining pool of market participants. Unless we can collectively engage a younger, less affluent, group of market participants, the public capital formation process is doomed to irrelevancy.

Small-cap investors may need to brace for lower returns There is also an important public policy reason for broadening participation rates in the small‐cap finance and trading markets. A report published by the McKinsey Global Institute on May 2, 2016, (Diminishing Returns: Why Investors May Need to Lower Their Expectations) suggests that investment returns in developed markets in North America and Europe are likely to be significantly lower in the coming 20 years than they have been in the preceding 30 years. The two principal reasons cited in the study are the prospects for lower overall growth in these economies and the lack of population increase. If this forecast is accurate, investors seeking higher than developed market returns will have look to investments in the small‐cap markets. If we continue to, effectively, limit participation in the small‐cap capital formation process to the accredited investors, we are denying the opportunity to access these investment opportunities to the vast majority of potential investors. This harms not just the investors themselves, but the companies looking to raise growth capital from the public markets.

To build a new constituency of younger and engaged small‐cap market participants, the CSE recommends the following steps be taken across the industry:

  1. Harmonize the crowdfunding rules across Canada. The current crowdfunding regime in Canada is too complicated: the steps required to ensure a compliant national offering are extensive, and eat into the modest potential proceeds of the process. The likelihood of a company unintentionally breaching the guidelines in a particular province or territory is high. The fragmented rules also raise compliance costs for portal operators hoping to conduct business across multiple jurisdictions. Economies of scale are more difficult to achieve, raising capital costs for their clients. The United States, in contrast, has a set of rules in place under Regulation A of the JOBS Act that provides for a clear set of guidelines across all 50 states.
  2. Implement a new means of prospectus‐exempt financing modelled after Regulation A+ of the United States JOBS Act. Unless we extend participation in the exempt market beyond the accredited investor exemption, the small‐cap finance industry will fail to gain the engagement of a new generation of potential investors. The success of television shows like “Dragon’s Den” in Canada and “Shark Tank” in the United States suggests that there is an appetite for entrepreneurial stories that extends far beyond the small segment of population represented by the accredited investor class.
  3. Regulation A+ permits issuers to promote participation in their fundraising initiatives through a variety of non‐traditional means. Canadian regulators, investment dealers and advisors, and small‐cap issuers have to come to grips with appropriate uses of social media and other communications media to engage with the broader investor population. As an exchange, the CSE can provide guidance and specific training to its issuers in these opportunities, if the rules are well understood.

If we are unable to engage a new generation of investors, whose numbers and potential investment resources are significantly larger than the few accredited investors relied on by the industry currently, then all of the technical measures designed to improve the operation of the small‐cap markets will prove irrelevant. While IIROC cannot alone implement any of these changes, the organization can be an important focal point for reform in assisting the industry in developing new means of engaging with the broader investing public.

Marketplace Operation Issues

As indicated in the introduction, the CSE has a number of views and comments on the marketplace operation issues cited in the Request for Proposal.

Short sale proposal

The CSE is sympathetic with issuers and their shareholders who believe that the current short sale rules, combined with the absence of buyer interest in many small‐cap stocks, provide a low risk opportunity for short sellers to profit. Allowing the short sale to create a new downtick, particularly in the case of sub‐10 cent stocks, results in a material decline in the market cap of the company. When the short position is covered, ideally (from the short’s perspective) at a still lower level, an even larger slice of the market cap of the company has disappeared. This is particularly frustrating for companies that are attempting to conduct a financing. The ability of companies to raise funds at greater than 5 cents per share (the minimum threshold for TSX‐V and CSE‐listing companies absent an exchange exemption) can be compromised by short selling pressure in the secondary market.

The CSE is prepared to support rule changes that will place restraints on the ability of short sellers to create a downtick on the initial trade. We do not support, however, a re‐institution of the former rules that were enforced at the trading system level of the exchanges. Bringing back the former rule, which involved a significant amount of programming and testing, would take a lengthy period of time to institute. In our view, the rule should be that a declared short sale may only be entered when accompanied by the “passive only re‐price” tag. The tag will enforce the requirement that a short sale has to be booked; it may not cross the spread to execute. If an order crosses the spread to trade against the short sale order, the likelihood is that the new sale price will represent an uptick from the last traded price. All of the Canadian markets currently support the passive only re‐price tag; instituting the new rule would not be held up by a lengthy technical implementation process. We would also support the standard exemptions (for example, exchange appointed market makers should be able to sell short without restriction), as were present in the former short sale rules. At first blush, we do not believe that firms using the “short mark exempt” tag (“SME”) should be exempt from this requirement. In general, these firms are computer aided, proprietary, high frequency trading firms that are not generally active in the small‐cap markets.

Settlement discipline

IIROC should examine whether firms are properly enforcing the short sale covering requirements. As a general rule, small‐cap stocks are not available for loans, nor are they margin eligible. For many stocks, there may be no assurance that a short position may be covered within the time limits required under UMIR. If firms are not enforcing the requirements properly, the economics of predatory short selling activity would improve to the detriment of the issuers, their shareholders and the broader market.

Tick size

We do not believe that modifying tick size for low priced stocks would have a material impact on liquidity or price continuity. The experience of the broader market when decimals were introduced suggests that overall liquidity would not change, but order size at each increment would decrease. Because more price levels would have to be accessed to fill orders, volatility would increase by reducing price continuity. Our experience for CSE‐listed stocks is that, in any event, the typical spread for the majority of small‐cap stocks is not at the minimum half‐cent or penny increment. Proponents of smaller tick size suggest that the measure would reduce the impact of short selling activity. In the CSE’s view, instituting the “passive only” requirement for short sales would have a more powerful impact on the identified problem. Proponents of larger tick size suggest that their plan would increase potential profits for market makers and other firms committing capital to trade a particular stock. The CSE suggests that IIROC and industry members study the results of the “Tick Pilot” in the process of being implemented in the United States before considering amendments to UMIR’s tick size provisions.

Board Lot size

Increasing board lot size is cited by a number of parties as a means of restricting short sale activity in small‐cap stocks. As described above, the CSE believes that the better measure is to prevent a short sale order from crossing the spread to execute the trade. Increasing the board lot size would have a significant negative consequence: many retail shareholders might find themselves holding an odd lot position in the stock. Odd lots receive no price protection in the secondary market, and, as a result, may trade at any price without violating UMIR or the national instruments. Execution quality for odd lots is a regular customer service issue for dealers: the CSE often deals with complaints from clients on the price that they received when trading an odd lot. The CSE has appointed odd lot market makers to address this concern, as odd lots orders are now automatically executed against the market makers book at the bid or the offer price. The fact remains, however, that handling customer odd lot orders effectively is a challenge for retail oriented investment dealers. Expanding the number of client odd lot orders would be harmful to the goal of increasing investor confidence in the fair and efficient operation of the small-cap markets.

Electronic trading

A number of industry participants have cited the advent of electronic trading as a major disruptor to the fair and efficient operation of the Canadian small‐cap markets. The CSE has supported research efforts by IIROC and other entities over the years aimed at identifying the impact of market participants who use computer driven strategies on the markets. From a CSE perspective, we have not been able to identify significant participation by these traders in the small‐cap names. We know these accounts from their activity in the highly liquid Canadian large‐cap stocks that the CSE posts alongside its listed companies. The CSE is in a position to say that these firms are not active in the CSE‐listed market. In general, the small‐cap market is simply not liquid enough to support strategies which effectively require the trading account to be flat at the end of the day.

Day trading activity

An area that has not been carefully studied to date is the impact of so‐called “day trader” activity on the operation of the small cap markets. Distinct from the high frequency trading firms, the day traders are generally individuals trading from their own account through a small number of firms established specifically for the purposes of supporting this kind of trading activity. Although these individuals may use computers to aid their trading, they do not rely on low latency strategies to achieve their trading goals. They also, unlike the high frequency traders, appear to be prepared to hold significant positions in a particular stock over a period of days. The CSE would welcome further study of the activities of these day traders, and encourages IIROC and the securities commissions to encourage this effort.


The CSE thanks IIROC for the opportunity to discuss these vitally important issues in an industry forum. As we have stated throughout this paper, our basic concern is that modest reform to the trading rules will not address many of the issues cited by market participants in the current state of the small‐cap markets. Unless the industry, which includes IIROC, the provincial securities commissions and (shortly) the CCMR, regulated dealers of all types, advisors, and issuer companies, is able to develop a model capable of engaging a new generation of potential investors, all of our mechanical changes to the markets will not produce the intended results. The CSE supports the development of a new, significantly broader, exempt market with two key components:

  • harmonized crowdfunding regulations across Canada, and
  • a new category of offering modeled after Regulation A+ of the United States JOBS Act, enabling companies to raise larger amounts of capital from a broad group of potential investors

Alleviating the Funding Crisis for Junior Companies: An Interview with Richard Carleton

Without question, Canadian junior and small-cap companies looking to raise public capital are facing what many consider to be a ‘funding crisis’.

Many of the headwinds facing these companies are driven by macro-economic factors, such as slowing global growth or pressures on commodity prices however that is only part of the picture. There are also a number of policy-related and structural realities of the Canadian capital ecosystem that are adding to the growing list of challenges that junior firms must try and overcome in order to raise investment capital at a reasonable cost.

Earlier this month Richard Carleton, CEO of the Canadian Securities Exchange, sat down with Jim Goddard of HoweStreet.com to discuss the nature of the funding crisis facing entrepreneurs seeking to raise investment capital, with a specific focus on the role that the CSE is playing to help provide a desperately needed solution.

Over the course of the interview, a variety of topics were covered including how regulatory decisions and recent economic conditions are impacting the Canadian independent broker dealer community; the emergence of crowdfunding; the current debate on the uptick rule and whether or not short selling should be allowed on junior/small-cap stocks and how the CSE is working to fulfill its mandate of providing cost-effective access to capital for publicly listed companies.

While the interview covers a lot of ground, one of the most compelling points is the possible landscape that could confront Canadian companies looking to raise capital should current conditions persist.

Citing the example of challenges faced by smaller investors not being able to widely participate in deals in the US, Carleton stated that by enabling individual investor participation in early-stage capital investments here in Canada, investors have the opportunity to  “profit in the growth of the Canadian economy and to help support the entrepreneurial spirit of individuals who create wealth for the country.” At the moment, however, more clarity is required on the exact mechanism that best serves this goal.

To listen to the full interview, click the video below and if you have any viewpoints on the current climate for raising capital, leave a comment or tweet your thoughts to @CSE_News.


Continuing to Deliver: An Interview with CEO Richard Carleton

CEO of the CSE, Richard Carleton at CSE Day Toronto, Spring 2015
CEO of the CSE, Richard Carleton at CSE Day Toronto, Spring 2015

Earlier this month, Canadian Securities Exchange CEO Richard Carleton sat down for an interview with Peter Murray of Kiyoi Communications to discuss the latest developments at the CSE.  Among the topics covered were the performance of the CSE in 2015, the expanding international profile of the CSE, the landscape for early-stage firms raising capital as well as the upcoming enhancements to the CSE.

Below is the full text of their interview. (Questions from Peter Murray have been placed in bold for clarity):

1. Let’s start with a review of 2015 in general. The Canadian Securities Exchange issued a press release recently highlighting continued growth in issuers listed, trading volume and other key metrics of performance. Can you comment on these and is your success a sign of companies finding that financing and other business activities became somewhat easier last year?

Actually, I think it is an article of faith in the industry that it is more difficult at the moment to raise public capital than it has likely been in a generation. And that is not just for companies that operate in the commodities space — given what we’ve heard from the entrepreneurial community it has been a challenge for companies in all sectors to raise capital over the past 12 months.

That is why I believe it is important that despite those difficult conditions we grew considerably last year over the record pace we set in 2014. We had the strongest year ever in terms of trading volume and grew the issuer base by 20%, among other achievements. I think the underlying message of the exchange, which is that we work with a broad number of industry participants to deliver the lowest cost of public capital, really is resonating with the entrepreneurial community. And frankly it is perhaps as a result of the difficult times that we have seen our business continue to grow.

2. It was encouraging to see several companies based in the United States make their public trading debuts on the Canadian Securities Exchange in 2015. Why did they choose the CSE over the alternatives and how is the listing process different for a company domiciled outside of Canada?

As with a Canadian company, an international company has to become a reporting issuer in one of the Canadian provinces before they qualify to list on the CSE. That is accomplished in one of a variety of ways, which can include an offering or non-offering prospectus. At some point in the not too distant future there will be the opportunity to do so via an offering memorandum. There are also the traditional techniques of reverse takeovers and asset purchases that have been used in Canada for years for private companies to become public.

For US companies in particular, I think it is fair to say that regulatory costs and civil liability burdens have put a significant hole in their early stage public capital markets. Much of the early stage capital is coming from venture capital and private equity sources. Companies look at the public market as an exit, not necessarily as a means of raising growth capital. So, when people who need to raise from $5 million to $50 million to build a company understand that you can do that in the public markets in Canada, it becomes a very attractive option.

Additionally, I would point out that entrepreneurs who take their companies public can often retain more control over the future direction of the enterprise than if they accept investment from a venture capital or private equity firm. You often see venture capital and private equity investors exert a very heavy hand on the future direction and management of businesses. From a cost perspective and that of the ability to control your destiny, people around the world find Canada a very compelling place to raise growth capital.

3. Can you give us some feedback on your interaction with issuers in 2015? And looking forward, what do you sense their goals and expectations are for 2016?

Let me start in more general terms by highlighting the results of a series of events we instituted in 2015 called CSE Days. These took place in Vancouver, Toronto, Montreal and New York. We invited issuers from each of the Canadian cities to spend a day with us talking in the morning about issues of specific interest to listed companies. We also focused on helping companies improve their presentation skills by having coaches work with their executives. We concluded the day with a mixer event where the corporate finance community was invited to meet the issuers and the keystone was the companies delivering two-minute pitches to the audience. Our issuers universally found these days to be helpful. They also found it worthwhile to meet not just their peers in the CSE issuer group, but to be introduced to a broader cross-section of the advisors and corporate finance professionals working in each city.

As far as what issuer goals and expectations are for 2016, I don’t think anybody is expecting conditions to change dramatically for the better in the commodities markets. The belief seems to be that it will continue to be a challenging environment for early stage companies of all kinds to raise capital. That being said, it is abundantly clear that there is more investor interest in technology, biotechnology and biopharma undertakings. Through the applications we are receiving we see what seems to be a general rotation of investor interest into those sectors.

4. Are there any other key developments from 2015 to highlight?

One of the first things the Canadian Securities Exchange decided it had to deliver was full electronic access to all of the discount brokerages operating in Canada, given that retail investors play such an important role in junior capital formation. It actually took until spring of last year to bring on board the last of the bank discount brokerage firms. And we saw as each of them came on over the last couple of years, significant enhancements in both the trading activity and market quality. That was a really important milestone, not just for the organization but for the issuers, and one I am pleased to say that we finally completed last year.

5. As we enter 2016, what are the trends you hear from the investment community, and how will these affect the CSE and its issuers? How can the CSE influence those trends?

As we start 2016 there is no shortage of concerning news. I recently heard Ian Russell, President and CEO of the Investment Industry Association of Canada, present the results of his organization’s CEO survey conducted in November, where they spoke to almost 200 of the chief executives of the registered investment dealers in Canada. The picture they painted was quite bleak. They anticipate that costs, chiefly driven by regulatory initiatives, will outstrip any revenue growth, and that there will continue to be a large number of independent dealers in financial distress as a result of difficulties in traditional strengths of the Canadian economy.

In working with that community we continue to look for ways to reduce their cost of operating wherever we can, to try to bring more business opportunities to the dealer community and ideally lower their cost of operations.

There are definitely things we can do as an exchange as well and international initiatives are a good example. When we attract companies from overseas to list in Canada, they are going to use Canadian dealers, lawyers, accounting firms and investor relations professionals to manage their go-public process. So we are bringing net new business opportunities to the local community.

In addition, we certainly are going to be part of the industry discussion about ways to try to improve the trading process in a manner that protects enterprise values for issuers and their investors.

6. Let’s discuss one of your international initiatives. The Canadian Securities Exchange signed a Memorandum of Understanding with the Taipei Exchange in November, and this comes on top of a close working relationship with the OTC Markets group in the United States. What benefits are there to the exchange itself from such international relationships? How about for issuers?

Really, the two questions are intertwined. We find that when companies list in jurisdictions in addition to Canada and have raised money in those jurisdictions, their liquidity profile improves overall. We see tighter spreads and deeper markets for domestically listed companies that are also quoted on the OTC market in the US or Frankfurt in Europe.

Many Canadians aren’t aware that Taiwan is a very dynamic economy heavily involved in precision manufacturing. Taiwan has a sophisticated material science community and in fact enjoys a large positive trade balance with the People’s Republic of China.

The issue that business people in Taiwan have, which is very familiar to Canadians, is that notwithstanding that expertise, it is a relatively small economy, with a population of some 22 million.

As a result, Taiwanese companies are looking for access to the global economy and over the years, for a variety of reasons, have looked to the United States for public capital and to establish that North American presence.

The CSE has always had a strong proposition for companies looking to access North America but at a significantly lower cost and regulatory footprint than they would see in the United States. We had an opportunity to meet with a variety of members of the Taiwanese financial community, including the Taipei Exchange, which is the medium and small enterprise exchange there. We have agreed to compare notes and look for opportunities to promote our issuers in the Taiwanese market, while also searching for opportunities for issuers on their market to potentially list in Canada and obtain access to North America.

For our issuers it is really the same thing. Taiwan has a sophisticated marketplace which is prepared to invest in early stage stories, especially in the technology space. We have a lot of companies that are looking to obtain an Asian presence, and just as we are a low-cost alternative to the United States, there are a lot of advantages for companies to use Taiwan as their stepping stone into the Asian market.

7. The regulatory landscape is constantly developing. Anything to comment on with regard to change at the CSE or ongoing collaboration with regulatory authorities?

We will be publishing proposed changes to our listings criteria in the next few weeks. Keep in mind that we have not amended the thresholds to qualify for listing since the material was originally filed with the Ontario Securities Commission in 2002. We will be raising the bar, but I don’t think the new standards would have had an impact on companies we have listed over the last couple of years had they been in place when those companies applied to us.

We will also likely introduce continued listing requirements that will entail certain enterprise value, size and business activity with the notion that the companies listed on the exchange must have a workable business plan and sufficient capital on hand to fund the programme for a reasonable length of time.

Another initiative is cooperation with the market-making community in Canada to see how we can incent their participation in our markets to a greater degree than happens currently. This will be with a view to ensuring there is a meaningful, two-sided market for every security listed on the Canadian Securities Exchange. It is a real challenge for junior markets – and this is true around the world – to provide for appropriate levels of liquidity for early stage companies, but we have a dealer community in Canada that is working with us to come up with solutions.

8. How do you continue to define the CSE in 2016? How does it differentiate itself from the other exchanges that small-cap and/or early stage companies might consider when they are thinking about going public?

It may sound like a cliché, but we always bring everything back to our overall mission, and that is to deliver the lowest cost of public capital to entrepreneurs looking to tap the Canadian equity markets. With that very clear mandate in mind we can measure all of the activities we are contemplating and if we are making progress in that direction then we know we are on the right track. We believe that not just given our fee structure but the overall cost structure for companies listing on our exchange, that they are in fact achieving the lowest cost of public capital as things stand currently.

We also need to continue to emphasize that the CSE serves entrepreneurs and that we have built an ecosystem that puts them in the middle. We are an independent exchange guided by the voice of the entrepreneur and that truly sets us apart.