TMX chief says a $20-million firm shouldn't carry Enbridge's regulatory burden
A $20-million company should not carry the same tax and regulatory burden as a multibillion-dollar giant like Enbridge Inc., the head of the company that runs Canada's main stock exchange said, arguing that lighter barriers are needed if Canadian capital markets are to compete globally.
John McKenzie, chief executive of TMX Group Ltd., was asked at a conference hosted by the Alberta Securities Commission whether he is worried about the falling number of issuers trading on the TSX. He said the decline is not unique to Canada and is partly a function of growth being concentrated in a relatively small number of large-cap names.
McKenzie said it is good to have Canadian heavyweights able to compete on the world stage, but he also wants small- and medium-cap companies to thrive and scale up. The compliance load that applies to a major multibillion-dollar company, he argued, should not have to be shouldered by a firm with far fewer resources.
On the flow of new business, McKenzie said TMX brought more than 300 new issuers into the market in the first nine months of the year. Two-thirds of those were structured products and one-third were companies, he said.
The remarks put the cost of going public and staying listed at the centre of Canada's effort to hold its own against larger exchanges. For smaller Canadian companies weighing a listing, the question is whether the burden of compliance scales with their size, or stays fixed regardless of it.
