The British Columbia Securities Commission (BCSC) will join its counterpart in Ontario to oversee the Canadian Securities Exchange (CSE), bringing a venture-market focus to the exchange, officials said.
The CSE has been expanding in recent years due to the listing of a number of B.C.-based “early-stage” companies in the cannabis sector. Officials say the addition of BCSC to the Ontario Securities Commission’s overseeing of the CSE allows the exchange to add the former’s experience in regulating such companies.
The CSE has experienced fivefold growth over the past two years, according to BCSC executive director Peter Brady.
“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.”
“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.”
The CSE has about 500 companies trading on the exchange’s platform. Market capitalization has risen “dramatically” since cannabis legalization in Canada, officials said.