You are here

Survey: Listed Co.'s Dissatisfied with TSXV

To download the survey click the PDF at the end of this article

Tuesday, November 11, 2003


Fails to deliver value for money; problems with liquidity, responsiveness and costs

TORONTO, Ontario ? The TSX Venture Exchange fails to serve the interests of its listed companies according to a nation-wide survey published today.

The survey, which interviewed senior management from 332 listed companies, was conducted by Grinslade Strategy Group, a full-service market research firm, and sponsored by the Canadian Trading and Quotation System Inc. ( There are approximately 2300 companies listed on the TSX Venture Exchange.

It identifies a high level of frustration among listed companies as more than half (52 percent) do not believe they receive ?good value? for the fees they pay the exchange. Specifically, the respondents are critical of the Venture Exchange in terms of the liquidity of their companies? shares, responsiveness to their needs and some specific costs associated with their listing.

Approximately one third of respondents (32 percent) express dissatisfaction with the liquidity of their shares. Furthermore, the same number of respondents (33 percent) does not feel that the Venture Exchange?s market always provides a reasonable two-sided market for their shares. Instead, 60 percent believe that having a dedicated market maker would increase the liquidity of their shares and the majority of respondents (64 percent) consider CNQ?s system with multiple market makers that compete against each other as an improvement.

The majority of listed companies do not feel the Venture Exchange helps them gain the critical exposure required for emerging ventures. More than half (54 percent) of respondents do not believe the Venture Exchange is interested in helping their companies increase their visibility. A significant majority (75 percent) believe that having an easily accessible exchange-hosted website that displays their company?s complete corporate and market information to investors would enhance their company?s visibility. CNQ is the only Canadian equity market that reflects the respondents? preference.

This finding speaks to a larger theme found in the survey related to client service. One-third (33 percent) of those surveyed do not believe it is responsive to their needs as an emerging company. Disturbingly many report significant delays in obtaining transaction approvals from the Venture Exchange. Forty percent of respondents cite such delays, with 19 percent experiencing a wait of three months or more. Another 21 percent have waited up to three months for their transactions to be approved.

According to respondents these delays have resulted in major disruptions in the execution of their business plans in some cases. Fifteen percent said transactions have fallen through because of the slow pace of the Venture Exchange?s approval process, resulting in the loss of business opportunities. Not surprisingly, a large number of respondents (38 percent) described the rules, policies and regulations of the exchange as ?complicated and expensive to comply with,? while the minority (14 percent) describe it as ?straightforward and easy to understand.? A strong majority (78 percent) supports the streamlined regulatory approach of CNQ.

Respondents express concerns around the costs of listing on the Venture Exchange. Half of respondents (49 percent) were dissatisfied with the fees charged. The survey found that a significant point of contention relates to the Venture Exchange?s decision to charge fees for the review and approval of transactions. More than half of respondents (51 percent) do not feel this is an appropriate expense for their companies to pay.

A solid majority of respondents (68 percent) express a preference for a flat fee structure, like that of CNQ, rather than paying separate transaction and filing fees as well as an annual sustaining fee based on their company?s market capitalization.

Questions related to CNQ found that almost 40 percent (36 percent) of respondents had yet to hear of this stock market, which officially launched this July, although more than half (56 percent) believe it is an improvement to the exchange they are listed on.

?This research publicly confirms what many companies speak about privately: their current exchange does little to serve their interests. It?s clear from these findings that senior management are frustrated that their needs remain unmet,? said Paul Chalmers, EVP, Canaccord Capital Corp. ?Companies want a simpler fee structure, a streamlined regulatory process and an alternative stock market model that offers integrity, transparency and liquidity.?

?Now that CNQ is a viable alternative, emerging companies have the opportunity to choose the exchange that offers them the best platform for growth,? said Ian Bandeen, Chairman and co-founder of the Canadian Trading and Quotation System Inc. ?These findings are not surprising to us given that we constructed our model only after extensive consultations with, and focusing on the needs of, our key stakeholders. It was the critical input provided by the dealer and issuer communities that has enabled us to provide a substantially improved service to the Canadian marketplace.?

The survey?s publication coincides with CNQ?s application to the Ontario Securities Commission to become a stock exchange. CNQ?s market model addresses the issues highlighted in this survey, and represents a dynamic alternative to the traditional exchanges, encompassing innovative technology to create a more efficient and responsive exchange.

About the Survey

Between October 28 and November 7, 2003 a total of 332, 10-minute telephone interviews were conducted with senior executives of companies currently listed on the TSX Venture Exchange. The results of a sample of 332 cases are accurate to within +/- 5 percent, 19 times out of 20.

The sample for the research was regionally representative and all respondents were randomly selected to complete an interview from the total universe of companies.

About CNQ (

Canadian Trading and Quotation System Inc. (CNQ) has created an innovative stock market that matches enhanced disclosure, market making and streamlined regulation with leading edge trading technology to meet the needs of Canadian companies. Combined with comprehensive regulatory oversight, this provides an efficient new equity market that fosters integrity, transparency and liquidity for investors, issuers, and investment dealers.

CNQ will host a presentation at the Design Exchange Trading Floor (234 Bay Street) in Toronto on Wednesday, November 12, from 10:00 a.m. to 11:30 a.m. In order to insure attendance, people are requested to RSVP to Radhika Joseph at [email protected] or 416.572.2000 ext. 2435.

- 30 -

For a copy of the survey and to speak with a CNQ representative, please contact:

Erica Belling/Stephen Hewitt

NATIONAL Public Relations


Related Downloadable Files
Adobe Acrobat Survey and Results
[47,552 bytes]

Actual Telephone Questionnaire and Results
Adobe Acrobat Grinslade Analysis PowerPoint
[1,271,216 bytes]

This presentation provides an analysis of the survey results.
Get the Acrobat Reader to view this file.