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Canada’s other exchange

What will Ned Goodman’s involvement mean for the CNSX?

by Greg Klein | Revised October 1, 2013

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The amount and terms are confidential but Canada’s other stock exchange got a boost in stature September 30 as Dundee Corp TSX:DC.A closed a strategic investment in the CNSX. Dundee president/CEO Ned Goodman, a strong critic of the TSX Venture regulatory regimen, becomes CNSX deputy chairperson.

Addressing a September 12 panel discussion hosted by the Venture Capital Markets Association, Goodman called the Venture “a feeding source for the legal community.” He added, “You need two hands to lift [the TSXV’s] book of regulations and policies. It’s absolutely mind-boggling all the things you’re required to do to raise a half-million dollars—which means that half of that half-million will go to lawyers.”

The CNSX model, on the other hand, “reduces the time and expense companies face in going public, and in maintaining a listing, along with a high level of continuous disclosure,” Goodman said in a statement accompanying the September 30 announcement.

What will Ned Goodman’s participation mean for the CNSX?

Ned Goodman: Competing with the Venture is “not going to be easy.
But I’ve created a career by
doing things that aren’t easy.”

Speaking to on October 1, Goodman says, “I’ve been around the CNSX for quite a while, I even have a company listed there [Eurogas International CNSX:EI].”

Stating his opinion of the Venture indirectly, he adds, “I think the country needs an entrepreneur’s stock exchange. So I decided to help out.”

Although he describes issuers’ regulatory responsibilities as “a fact of life” largely originating with the securities commissions, he says the TSXV compounds those obligations. “I would say there’s tremendous difficulties, there’s things thrown in there that mean your legal fees to get listed or stay listed are punishing, and it’s almost like it was built for lawyers. You can’t do it on your own and entrepreneurs like to do things on their own.”

CNSX Markets CEO Richard Carleton sees two-fold significance in Dundee’s investment. “We look at it as a powerful endorsement of our services and our proposition from one of the major figures in junior capital finance in Canada,” Carleton tells “Secondly, it provides us with more resources to continue our program of supporting the work of junior capital issuers in Canada with better quality secondary markets through some work we’re doing with the dealers, and to build a market-making program that will ideally provide continuous two-sided quotes for all the issuers on CNSX. We’re also looking to build more bridges to the independent dealer community, and of course Ned is a very important figure there too. We want to help them reduce their cost of trading and do their corporate finance activities more effectively in a lower-cost environment.”

But rather than build up the alternative, a new advocacy group called the Venture Capital Markets Association wants to fix the Venture. Just prior to the official launch in early September, founder and Cambridge House International chairperson Joe Martin told that over-regulation imposes unnecessary burdens on already struggling companies. After the Vancouver, Calgary and Montreal exchanges merged with Toronto, he explained, juniors lost “infrastructure” that promoted venture capital.

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