The Canadian Securities Exchange (CSE) will seek to tailor the rules and regulations of the National Stock Exchange of Australia (ASX:NSX) to smaller early stage companies should its proposed acquisition go ahead.
Speaking exclusively to Mining.com.au, CSE Chief Executive Richard Carleton sees an opportunity to mirror some of the exchange rules and regulations, including disclosure practices, of the CSE and tailor them towards juniors.
One of the challenges in Australia, Carleton says, is there is one main exchange – and essentially one rule book regardless of whether a company is a major such as BHP (ASX:BHP) or Rio Tinto (ASX:RIO) or an early stage exploration company.
“The whole notion is that there is a specific set of rules, and then that carries in the securities legislation for smaller companies. And that is mirrored in the rules for the Canadian Securities Exchange, for example, where we do have specific rules for mining exploration companies,” Carleton tells this news service.
“So the required distribution of shares, for example, is not the same as for larger companies. We do have prior work requirements and requirements regarding resources, so in effect, funds available. The plan has to be laid out in terms of how the funds are going to be expended. And of course, we have a very similar regime to the JORC. In Canada, it is called the 43-101 report. In fact, it was adapted from the JORC.
“And that’s what we’re looking to do here in Australia with our colleagues at the NSX to really have that opportunity to present a set of exchange rules and regulations, disclosure practices and so on, which are tailored to the smaller companies”
“So there is really a whole set of rules that specifically apply to the junior space. And that’s what we’re looking to do here in Australia with our colleagues at the NSX to really have that opportunity to present a set of exchange rules and regulations, disclosure practices and so on, which are tailored to the smaller companies.”
CNSX Markets, which is the operator of the CSE, has been an investor in the NSX since 7 May 2025 and has entered into a scheme implementation deed to acquire the 88-year-old Australian bourse.
Under the scheme, CNSX will acquire all shares in the NSX that it does not already own by paying $0.035 cash per share. The scheme is not subject to financing or due diligence conditions and its implementation is expected on 15 September.
Carleton notes there has been a declining number of IPOs across most exchanges for several years, and in his experience in Canada, by focusing on products and services from the exchange perspective, the country and CSE alike has focused on early stage companies.
This in turn has seen the Canadian exchange enjoy “tremendous growth” despite “very tough conditions”.
Mining.com.au previously reported there is a growing chorus of junior explorers disgruntled with the ASX for a myriad of reasons. Lion Selection Group (ASX:LSX) Managing Director Hedley Widdup says the “heavy-handedness” enforcement of the rules by the main exchange and varied interpretation of those that relate to disclosure are some of the main reasons.
However, as HLB Mann Judd Partner, Corporate and Audit Services Marcus Ohm explains to Mining.com.au, the tie-up is unlikely to make a significant impact on the market overall in the short-term.
Ohm’s view is that the NSX has not been a major player in the Australian market primarily due to a perceived lesser profile versus the Australian Securities Exchange (ASX) and lesser liquidity.
“In terms of positives, it may lead to greater interest in the NSX as a whole and I think it provides the opportunity to review the positioning of NSX and take steps to increase its role in the Australian market. In that context, there are few negatives,” Ohm tells this news service.
“The market is always a balance between meeting the needs of companies seeking a listing and maintaining market integrity and rigour. The ASX is one of the few major exchanges in the world which combines relatively low barriers to entry (no requirement to have made a profit for example), high levels of corporate governance, and the advantages of a main board listing.
“Whilst there may be occasional issues, the ASX actively seeks to address these where that is possible within its framework. The ASX remains a highly suitable vehicle for the listing of junior stage exploration companies in Australia. Whilst the NSX has simpler listing rules, more rigorous rules such as those on ASX can serve to attract investment in demonstrating high governance levels.”
It is possible that this will lead to greater activity in the long run as the CSE works to leverage the transaction. However, Ohm thinks the drivers of future activity will be far more reliant upon macro and geopolitical factors, which will in turn indirectly influence listing volumes.
Australia’s IPO market in 2024 endured its lowest activity in two decades. An HLB Mann Judd report notes poor listing volumes were reflective of another challenging year for listings, with significant macro and political factors globally.
Last year had just 29 listings – a 9% decline on the 32 IPOs on the ASX in 2023. At the same time, total funds raised surged 387%to $4.1 billion, compared to $847 million in 2023.
There are only two upcoming listings on the Australian bourse and both are mining companies – Robex Resources and VBX. These are companies intending to list over the next four to six weeks that have made an application.
So far this year just over $3 million has been raised on the NSX. In 2024, almost $51.4 million was raised, while the total in 2023 was over $54.3 million. This pales to the $726.1 million raised in 2010.
Meanwhile, there are no upcoming floats on the National Stock Exchange of Australia. Recent listings on the NSX include Province Resources (NSX:PRL) and NuCoal Resources (NSX:NCR) in March, with Danakali (NSX:DNK) listing in December 2024 and Nuren (NSX:NRN) in August.
Write to Adam Orlando at Mining.com.au
Images: Unsplash
