(July 11 – 16:25 ET) – The next step in the realignment of Canadian stock exchanges will see the Canadian Dealing Network transferred from the Toronto Stock Exchange to the Canadian Venture Exchange Inc.

The CDNX has now opened its own office in Toronto and says it is “in the final stages of its discussions with the Ontario Securities Commission” about opening for business in Ontario. It is currently expected that the assets of CDN will be acquired by the CDNX in September. However, the exact timing is subject to its current discussions with the OSC. CDN quoted companies may be invited to list on the CDNX prior to the acquisition, likely over the summer.

Once CDN issures are added the CDNX will introduce a third tier of listings. The existing exchange has two tiers, with companies in one or the other depending on their financial status. The more senior companies are listed in tier 1.

Tier 3 will be limited to current CDN quoted companies invited by the CDNX to list on tier 3. Issuers listed on tier 3 will have to meet tier 2 listing requirements to maintain their tier 3 listing. If they fail to meet tier 2 requirements, they will be designated ‘inactive’. Inactive issuers will be given 18 months to continue to trade on tier 3 and attempt to reach tier 2 requirements. If they fail to reach tier 2 requirements during this period, they’ll be delisted.

Companies listing on the CDNX will automatically become reporting issuers in each of Alberta and B.C. but not in Ontario. The CDNX is applying to the Alberta and B.C. securities commissions to give CDN issuers until June 30, 2001 to report in those provinces.

All three tiers will be traded on the electronic TradeCDNX, scrapping the CDN’s market system.

Companies, which are not quoted on the CDN, and merely have their trading reported to the CDN, will not be invited to list. The CDNX has made a proposal to the OSC to develop a Web-based reporting system for trading in unlisted securities in Ontario.

The CDN and the CDNX have also been communicating with the federal Department of Finance in an attempt to preserve the different tax treatment for CDN quoted companies. These discussions are ongoing.
-IE Staff