Karen Baxter does an excellent job of summarizing the meeting held yesterday in Vancouver. There were lots of out bursts and comments flying around. Noticeable is the lack of coverage by all media except the article below. A billion dollar BC industry spiraling down the drain and no one cares?
TMX’s TSX-V vows “revitalization” at Vancouver meeting
TMX Group Ltd (C:X)
Shares Issued 54,392,253
Last Close 1/28/2016 $40.00
Thursday January 28 2016 – Street Wire
by Karen Baxter
There were not enough chairs to hold all the people who attended the TSX Venture Exchange’s “town hall meeting” Thursday afternoon in Vancouver.
Three hundred people, some forced to stand, packed the room at the Pan Pacific Vancouver Hotel and kept the meeting going for an hour past its scheduled run time in order to hear John McCoach, president of the TSX-V, and Nick Thadaney, the TMX Group’s president and CEO of global equity capital markets, discuss proposed improvements to the TSX-V.
This was one of several such meetings being held all over Canada. They are being called to discuss the findings of the exchange’s December, 2015, white paper, in which it vowed to improve the lives of its clients in three main areas: cost reduction, liquidity enhancement and listing diversification beyond mostly resource stocks.
Not surprisingly for the city that birthed the colourful Vancouver Stock Exchange, the crowd was a rowdy one. Mr. Thadaney found that out when, just seconds into his opening remarks, he said that Canada’s venture capital market was practically born in Vancouver and that Canadians had proved themselves “one of the best at something in the world: … [having] one of the best venture systems in the world.” Members of the audience, many of them resource company executives and investment professionals, interrupted with calls of “Not anymore!” and muttered oaths.
The audience would continue to pepper the afternoon’s remarks with guffaws, applause and whistles when the spirit moved them.
Mr. McCoach in particular faced frequent interruptions as he attempted to summarize the contents of the white paper. (The summary in itself was not a popular move with some members of the audience, who said they had already read the paper and told Mr. McCoach to “get going” and stop “hand-holding.”)
He managed to get through most of his presentation anyway. On the cost-reduction front, he explained that the TSX-V wants to reduce companies’ administrative and compliance burden, for example by automating on-line filings, eliminating the need for sponsorship and shareholder meetings in certain situations, and introducing “kind of like a quasi-Nexus program” for proven, active directors so they do not have to keep renewing their personal information forms.
Much to the displeasure of the audience, Mr. McCoach said the TSX-V does not plan to reduce its own fees or reduce its fee schedule. This drew accusations that Mr. McCoach is just “trying to maintain his job.” One audience member said he felt “very bitter” that listed companies have had to make cost cuts amid tough times and the TSX-V has not.
Moving on to the investor-awareness campaign, Mr. McCoach said the TSX-V’s plans include “showcasing” companies to fund managers, retail investors, research analysts and other parties. (The companies selected for this honour will not have to pay a dime, he said in an interview after the meeting — except, of course, they must pay their own way to the showcases.) Mr. McCoach also said the TSX-V will seek to change the rules so that U.S. investors will find it easier to invest in small Canadian stocks. How it would accomplish that was not clear.
Finally, on diversification, Mr. McCoach said resource companies currently make up 70 per cent of the TSX-V and he would like to see the number move toward 50 per cent. He said the company is hiring for a sales group that will have one person in Vancouver, one in Montreal or Ottawa, one in New York or Boston, and one in Palo Alto or San Francisco. They will “go out and prospect for the dealer community,” said Mr. McCoach.
The audience seemed somewhat intrigued by that idea but more interested in whether the exchange will get rid of the inactive “zombie” stocks that keep the number of one- and two-cent companies so high. One member of the audience asked why the exchange did not delist those companies rather than moving them to “the purgatory which you call the NEX.” Mr. McCoach defended the exchange’s delisting standards as “transparent and enforced.” This sent off a roar in the audience, one member of which accused Mr. McCoach of telling “bald-faced lies.”
Mr. MrCoach pointed out that there is little that the TSX-V can do in certain areas. The securities commissions, the Investment Industry Regulatory Organization of Canada, and the federal and provincial governments have powers that the TSX-V lacks, said Mr. McCoach. He said he would pass comments on to those bodies and that they are listening closely. This too drew laughter and skepticism from audience members, one of whom called it “just hot hair.”
A good chunk of the afternoon was devoted to polling the audience. Questions included:
1. Should the TSX-V go back to being dealer-owned rather than being a non-profit organization? (Most said yes.)
2. Should the TSX-V be rebranded? (Most said no and urged a focus on “improving the fundamentals of the marketplace.)
3. Do you believe that the short selling has a material negative impact on the market? (Most said yes and that the uptick rule should be reintroduced.)
4. Should continued listing standards be more stringent? (Most said no, but one audience member explained that he voted no because the standards should not be changed, just enforced.)
5. Should the exchange regulate director and management compensation? (Most said “no” or “just for inactive issuers.”)
Mr. McCoach said the answers to these and other questions, from all the meetings, will be compiled and disseminated in some form toward the end of February.
The mood of the audience, during and after the meeting, is perhaps best summed up up by the following exchange between Mr. Thadaney and one audience member. “We don’t have this thing solved,” said Mr. Thadaney.”No, that’s apparent,” came the response.
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