CNSX Markets (CNSX), the operator of the Canadian Securities Exchange (CSE), is embarking on a roadshow to engage shareholders regarding its offer to acquire the National Stock Exchange of Australia (ASX:NSX).
Speaking exclusively to Mining.com.au this morning (23 May) from Sydney, CSE Chief Executive Richard Carleton says CNSX Markets and CSE have been eyeing the National Stock Exchange for a long time as a potential investment opportunity.
Fortuitously, Carleton says timing of the proposed deal comes as he is in Australia this week to speak at the Stockbrokers and Investment Advisers Association annual conference in Sydney on 20 May where he joined representatives from the brokerage community, the NSX and the Australian Securities Exchange on a panel titled ‘Are Australia’s Capital Markets Broken?’
When asked if he believes Australia’s capital markets are broken and whether the takeover of the NSX forms part of the CSE’s strategy to fix them, the Canadian Securities Exchange CEO laughs but says in jest this offer has been “20 years in the making”.
“As I said at the panel, I hope they’re not broken because if they are, I’m going to have some explaining to do to my shareholders, of course,” Carleton jokes.
“We think there’s a tremendous opportunity in working with Max Cunningham and his team here at the NSX to really focus on the early stage companies in the Australian market.”
Carleton and his team have been meeting with the regulators, brokers, as well as service providers and others while in Australia to discuss the scheme implementation deed to acquire the 88-year-old Australian bourse.
As reported, CNSX Markets has been an investor in the NSX since 7 May 2025 and currently holds a 4.85% stake in the company. Under the scheme, CNSX will acquire all shares in the NSX that it does not already own by paying $0.035 cash per share, which represents a 59% premium to the NSX closing price on 16 May 2025, the last day of trading prior to announcement of the offer.
The SID and scheme are not subject to financing or due diligence conditions. With the first court date on 1 August 2025, the implementation of the scheme is expected on 15 September.
Should the deal go ahead, CNSX Markets is unlikely to rebrand or change the name of the National Stock Exchange of Australia as it prefers to ensure consistency in branding and messaging to the market.
The NSX will continue to be operated locally by its management team, each member having deep expertise in the exchange space. With the support being provided by the CSE, the NSX will reportedly be better able to offer a credible and service-oriented alternative for the capital formation and liquidity needs of emerging companies in Australia and beyond.
As NSX Chief Executive Max Cunningham explains to this news service, the proposed transaction comes at a time when Australia needs a venture style market, and follows an internal rebuilding of the NSX during his tenure so far.
“At the end of the day, what the board decided is really what we’ve got to do is maximise the value of this very valuable asset and about a year ago, we rebuilt the team and we’ve focused primarily on, what is our specialty? And that is exactly what Richard’s been talking about – we think Australia desperately needs a venture style market,” Cunningham tells Mining.com.au.
“The more I looked at the CSE, the more I saw they look exactly like where we want to be. I think if something’s been tried and tested, why wouldn’t you be doing it in a market that looks exactly like you on so many levels, particularly, particularly the makeup of the issuers?”
Apathetic towards ASX
There is a growing chorus of junior explorers disgruntled with the ASX for a myriad of reasons, as reported by this news service. Lion Selection Group (ASX:LSX) Managing Director Hedley Widdup believes “heavy-handedness” enforcement of the rules by the ASX to be one of them.
Carleton adds that there have been a growing number of companies to delist from the incumbent exchange over the course of the past several years, while the CSE has actually seen an increase in listings.
“As everybody knows, there is a declining number of public companies, active businesses which are listed on the local exchanges. And of course, that’s not just an Australian phenomenon, it’s something that’s been experienced by cash equities markets around the world,” CSE’s Chief Executive adds.
In his experience in Canada, by focusing on products and services from the exchange perspective, the country and CSE alike has focused on the early stage community, and as a result the exchange has enjoyed “tremendous growth” despite “very tough conditions”.
The CSE currently hosts about 760 companies (active issuers) and no exchange-traded products, or ETFs.
Carleton and Cunningham note that one of the challenges in Australia is there’s one main exchange – and essentially one rule book. And whether a company is a major such as BHP (ASX:BHP) or Rio Tinto (ASX:RIO) those rules are essentially the same and apply to an early stage exploration company.
“And that means that the exchange has to do a lot of things to accommodate that junior explorer because of course they don’t have the resources or the revenue base to support some of the expectations of the larger mining companies,” Carleton continues.
“Now in Canada, we actually have a concept of really a two-tier regulatory framework for reporting issues. So there are the so-called venture stocks, and this is under securities law, this isn’t from the exchange rules, that have less prescriptive corporate governance, smaller boards, lower costs, less reporting. There’s in fact no requirement for the companies to pre-clear continuous disclosure statements, for example.”
Lion’s roar about ASX
Lion Selection’s Widdup thinks a great many junior explorers in Australia are disgruntled at the enforcement of rules, particularly the varied interpretation of rules that relate to disclosure on the ASX.
“To my mind this is as much a factor of how many companies are reporting, and need compliance officers, who all need to try and maintain a uniform interpretation which would be very challenging especially when they themselves tend not to be technical people,” he says.
“So they are trying to regulate uniform disclosure in something they don’t have a working knowledge of.”
Widdup thinks any exchange operator in Australia will need to maintain JORC compliance for disclosure standards so there is the same possibility for frustration from reporting companies.
If this is the gripe, in his mind the solution is in how the market operator engages with the disclosing companies and the peak body (such as JORC, AusIMM, or AIG) especially on instances where either unique issues are being disclosed or an instance of ‘inconsistent interpretation’ arises.
“There is a large body of experienced people that could be utilised in an independent fashion to lubricate the discussion – maybe in a similar way that the Takeovers Panel can be convened in certain change of control circumstances and independent experts are called on to advise or adjudicate,” Widdup continues.
“There are other disclosure gripes – such as what can form the basis of an economic study – again, those are rules and not the exchange,” Widdup continues.
The National Stock Exchange of Australia was formed in 1937 as the Newcastle Stock Exchange. It listed on the ASX in 2005, the same year it acquired the Bendigo Stock Exchange, and changed its name to the National Stock Exchange of Australia in 2006.
It relocated its headquarters and operations to Sydney in 2016. NSX has a tier-one market operator licence for the listing and trading of equity securities, corporate debt and miscellaneous investment scheme units.
Write to Adam Orlando at Mining.com.au
Images: Unsplash
