Growing junior exchange needs extra oversight: BCSC

Canadian Securities Exchange has seen a fivefold increase in companies in just two years

An increasingly popular junior exchange for penny stock promoters will soon fall under the direct oversight of the BC Securities Commission (BCSC).

The BCSC announced last week it will now be assisting the Ontario Securities Commission in overseeing the Canadian Securities Exchange (CSE), which has experienced fivefold growth over the past two years, according to BCSC executive director Peter Brady.

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“The growth of the CSE – we’re talking five-fold over the last two calendar years was a significant factor,” Brady said. “It has become a significant platform in the venture market. Another big factor is that over half the listed companies are based here in B.C. And a third factor is we have a lot of expertise in the junior markets and we felt we could add value.”

The CSE’s growth is largely attributed to cannabis listings, according to the BCSC.

“With the legalization of cannabis in Canada and in some U.S. states, CSE market capitalization has risen dramatically in the last two years,” noted the commission’s announcement on April 26.

The commission will now oversee the rules by which the CSE operates to ensure the exchange is compliant and acting lawfully within the Securities Act.

The BCSC also oversees the TSX Venture Exchange.

“The BC Securities Commission brings extensive knowledge and experience to the public venture markets by virtue of its long history regulating the junior mining sector and overseeing the TSX Venture Exchange with the Alberta Securities Commission,” said Brenda Leong, the BCSC’s chair and CEO.  “We believe we can add significant value to supporting venture financing on CSE and managing issues unique to early-stage companies.”

Brady said the BCSC looks forward to collaborating with the Ontario Securities Commission to oversee the CSE.

“The Canadian Securities Exchange is home to a large number of public companies domiciled in British Columbia,” said Richard Carleton, chief executive officer of the CSE. “We will continue to work closely with our colleagues from the British Columbia Securities Commission to enhance our collective investor protection efforts and access to capital for B.C.-based entrepreneurs.”

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