Ned Goodman aims to boost CNSX exchange as alternative to TSX – by Peter Koven (National Post – October 1, 2013)

The National Post is Canada’s second largest national paper.

Ned Goodman has felt for years that the Toronto Stock Exchange and its venture counterpart are failing entrepreneurs. Now the chief executive of Dundee Corp. is doing something about it.

Mr. Goodman, 75, has acquired a third of CNSX Markets Inc., which operates the Canadian National Stock Exchange (CNSX) and Pure Trading, and joined its board as deputy chairman. He is teaming up with Tom Caldwell, a veteran investor in stock exchanges, to promote the CNSX as a viable alternative to the TSX. The dollar value of the deal was not disclosed.

His view is that it has become too expensive, time-consuming and burdensome for start-up companies to raise small amounts of money on the TSX. They can face absurd legal bills to get a deal done, he said in an interview.

“Virtually ever issuer on the Venture exchange is not happy with it,” he said. “Once we get one or two companies [to switch to the CNSX], lots will follow.” The move comes as small-cap resource companies, a group that Mr. Goodman knows well, have fallen completely out of favour with investors. They are struggling to raise money or generate any trading in their stocks on the Venture exchange.

His challenge is to convince them that things will be any better on the CNSX, a tiny player in this business.

Mr. Goodman believes banks make for poor owners of stock exchanges, as they are worried about strict compliance issues and are out of touch with the needs of start-up entrepreneurs.

“What an exchange does is bring together people who have ideas with people who have money to invest. We’re 100 miles from that fundamental right now,” said Mr. Caldwell, the chairman of Urbana Corp. Urbana, which invested in the CNSX last year, holds a 33% stake in the exchange. It owned 49% prior to Mr. Goodman’s investment.

The CNSX was founded in 2001 and has been a recognized stock exchange since 2004. It charges a flat fee of $12,500 for a listing and then $500 a month after that. The TSX Venture Exchange has listing fees of between $7,500 and $40,000.

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