ASE
and VSE Governors Approve Merger |
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New Canadian junior capital market will have regional services offered
in Vancouver, Calgary, Winnipeg, Toronto and Montreal, supported by a corporate office in
Calgary, operations office in Vancouver
VANCOUVER-- The Boards of Governors of the Vancouver Stock Exchange
(VSE) and The Alberta Stock Exchange (ASE) have agreed - subject to regulatory approvals -
to merge the two exchanges to form a new Canadian junior capital market and will now ask
their member firms to ratify the merger by the end of June. It is anticipated that the
name of the new exchange will be selected and approved by the members at that time.
The Vancouver, Alberta, Toronto and Montreal stock exchanges announced March 15 that
they had signed an agreement in principle to restructure the Canadian capital markets
along the lines of market specialization, including a merger of the Vancouver and Alberta
exchanges.
The merged ASE/VSE entity will also consolidate the operations of the Canadian Dealing
Network (CDN), a subsidiary of the Toronto Stock Exchange, and junior companies now listed
on the Montreal Exchange. An invitation has been extended to the Winnipeg Stock Exchange
to participate in the new junior market.
Roslyn Kunin and Jim Sorenson, Chairs of the VSE and ASE respectively, announced today
at simultaneous press conferences in Vancouver and Calgary that the new Canadian junior
capital market will provide regional services in Vancouver, Calgary, Winnipeg, Toronto and
Montreal, supported by a corporate office in Calgary, and an operations office in
Vancouver.
The new exchange's Board of Governors will have representatives from the investment
industry and the public from across the country. Operations will begin by late 1999. The
CEOs of the VSE and the ASE, Michael E. Johnson and Tom Cumming, will manage the
transition as co-CEOs until the board of the new exchange appoints a permanent CEO.
The objective of the new junior exchange will be to provide entrepreneurs and
innovators in every region of the country with access to public equity capital, while
increasing the protection and flow of information to investors.
The new junior capital market will serve the needs of the junior mining and energy
industries, plus provide programs for technology and biotech companies.
The new market's services will be available in all regions of the country, but does not
require a physical headquarters. "Head offices for stock exchanges date back to the
days of trading floors and local investors investing in local enterprises. For our
totally-computerized trading system and our national approach to financing and investing,
a head office is a concept that is irrelevant," said Sorenson.
The regional offices will provide corporate finance, market regulation and marketing
services. The corporate office in Calgary will be responsible for planning, corporate
finance and management responsibility of the regional offices in Montreal, Toronto and
Winnipeg. The Vancouver operations office will provide trading, technology, marketing,
compliance, and market information services.
Sorenson and Kunin said employment levels of the VSE and the ASE should not change
significantly under the merger. "The exchanges will need current employees to
facilitate the merger over the next 12 to 18 months. Once the merger is complete, we
anticipate minimal job reduction; however, a number of employees may be re-deployed to new
assignments to accommodate the growth of the new exchange."
Sorenson said Calgary's traditional role as the centre for the junior oil and gas
industry and Vancouver's industry expertise in the junior mining sector would be enhanced
by the formation of the new exchange. "Vancouver and Calgary have over the years
assembled the engineers, geologists, accountants, lawyers and corporate finance experts to
serve their respective industry sectors. These support industries would thrive in their
existing locations under the new national junior exchange."
He said the new junior exchange's most successful companies will follow a seamless
graduation path to The Toronto Stock Exchange. "Nowhere else in the world would a
country's junior and senior equity exchanges be so closely aligned. We believe this would
substantially increase the participation of companies and investors in this market,"
Sorenson added.
Kunin said, "Market integrity is the most important asset of any market. Our
investors will benefit from a well-regulated, fair and accessible market with enhanced
protection through uniform regulatory standards, consistent enforcement, and improved
market information."
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