Ned Goodman sees opportunity in CNSX, the operator of the Canadian National Stock Exchange and Pure Trading platform.
Goodman’s company
Dundee Corp. (
TSX: T.DC.A,
Stock Forum) said Monday it has joined investment firm
Urbana Corp. (
TSX: URB.A,
Stock Forum) in taking roughly a one third interest in CNSX, an alternative for companies seeking to gain a stock exchange listing in Canada.
Goodman is also joining the CNSX board as deputy chairman.
In an interview with Stockhouse, Goodman said he plans to work with CNSX Chairman Thomas Caldwell “to build a better stock exchange than Canada already has.’’
A recognized stock exchange since 2004, CNSX currently boasts 180 equity issuers, 50% of which are in junior mining exploration, with another 20% in information technology, clean tech and life sciences. It also lists eTFs, and government debt. Pure Trading is a platform for trading TSX and TSX Venture stocks.
Goodman said he is buying an interest for the very same reason that
Royal Bank of Canada (
TSX: T.RY,
Stock Forum) is leading a consortium, which is launching a new Canadian exchange –
Aequitas – with the aim of thwarting unfair competition from high frequency traders.
“It’s a good place to be,’’ he said.
New players such as Aequitas and CNSX only mean more competition for
TMX Group Ltd. (
TSX: T.X,
Stock Forum), the operator of the Toronto Stock Exchange and TSX Venture Exchange, the traditional home for junior stocks in Canada.
TMX Group was acquired last year by a consortium of Canadian banks and investors, known as Maple Group.
News that Goodman is teaming up with Caldwell at CNSX comes at what appears to be a critical period for stock exchanges in Canada.
Due to the collapse of the junior exploration sector, the TSX Venture Exchange is faced with the possible loss of hundreds of issuers who are struggling just to keep the lights on.
While regulators such as the Ontario Securities Commission and British Columbia Securities commission have a mandate to protect investors and foster an efficient raising of capital, one junior mining industry official said there is a feeling out there that the pendulum has swung too far in the direction of protecting investors.
He said some sections of the junior sector hold the view that the TSX and TSX Venture exchange are too focused on looking after the senior issuers, leaving the smaller guys out in the cold.
“Junior markets are in danger of dieing from over-regulation,’’ the industry official said.
It is a view that has often been expressed by strategic investors like Goodman, who oversees about $10 billion for Dundee and its investments in real estate, resources and infrastructure.
“The Venture Exchange is not an easy place to list and it is costly from a legal point of view,’’ Goodman said.
One of CNSX’s immediate goals is to launch an advertising campaign in a bid to attract more issuers and promote itself as “the exchange for entrepreneurs’ in Canada.’
“As a lifelong entrepreneur, I have no problem encouraging and inviting management and boards of entrepreneurial Canadian public companies to consider the benefits of a CNSX listing,’’ Goodman said.