A review of the TSX Venture Exchange Inc. finds that the exchange is doing its job as a regulator, although there is some room for improvement.

On Monday, the British Columbia Securities Commission and the Alberta Securities Commission jointly released their oversight reviews of the TSX Venture Exchange Inc. concerning the exchange’s performance in fulfilling its regulatory functions as a stock exchange.

The BCSC reviewed the exchange’s compliance, trading operations, trade policy development and trading systems, and the ASC reviewed its corporate finance policies and corporate governance and risk management processes.

In both areas, the regulators concluded that the TSXV meets “the appropriate standards for market operation in all material respects”. Both regulators found a few areas for improvement however.

The BCSC reports says that while commission’s staff are generally satisfied that the TSXV’s resources and operations substantially meet its requirements, BCSC staff did identify “potential operational risks, which could result in negative outcomes if not remedied.” They recommend procedural enhancements to mitigate those risks. In particular, the BCSC recommends improvements to the TSXV’s direct market access review and approval process, as well as its trading rule monitoring and enforcement procedures.

In its report, the ASC makes some recommendations regarding processes that the commission says should be reviewed on an ongoing basis to ensure adequate control processes are in place. Specifically, the ASC calls for improvements to the documentation of processes for corporate finance waivers and the introduction of additional quality assurance processes for filing and listing applications.

”The findings raised in this report represent gaps in the control environment of the exchange that can be addressed by process enhancement,” the ASC says. “Addressing the findings identified and implementing suggested process revisions will ensure that TSXV’s control environment meets ongoing regulatory requirements as the exchange continues to grow in a rapidly changing marketplace.”

The regulators say they will work with the exchange to ensure these issues are addressed.

IE