Newspaper article The Canadian Press

TMX Group to Launch Private Markets Business for Startups, Entrepreneurs

Newspaper article The Canadian Press

TMX Group to Launch Private Markets Business for Startups, Entrepreneurs

Article excerpt

TMX Group to launch private markets business

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TORONTO - The operator of the country's largest stock exchange is expanding into the private sector with a new business aimed at helping Canadian startups raise money, and eventually go public.

The idea of connecting these small- to medium-sized firms with capital investments is not entirely foreign to TMX Group (TSX:X), says Kevan Cowan, president of TSX Markets and group head of equities at the company.

"For decades, we've been engaged in facilitating the growth and financing of young companies... These elements are not new to us," he said in an interview Tuesday.

"We are looking to capitalize on that experience and that expertise and expand it into this area."

TMX said the launch of TSX Private Markets will give registered dealers "access to unique investing opportunities" that will assist private firms secure key capital in the early-to-mid stage of their development.

The company, which operates the Toronto Stock Exchange, said it anticipates the service to be launched in the third quarter of this year, pending approval by the Ontario Securities Commission. The service will be overseen by TMX subsidiary, Shorcan Brokers Ltd., along with a registered exempt market dealer.

The exempt market is a cheaper alternative for companies who are not publicly listed, but has been criticized for being an easier place for fraud to take place because listed firms do not need to provide detailed documents to investors.

The move by TMX Group comes as it prepares to compete against a new proposed exchange, Aequitas Innovations Inc., which is backed by Royal Bank (TSX:RY), BCE Inc. (TSX:BCE), Canadian pension fund PSP Investments, and a number of Canadian and international brokerages.

Aequitas could be up and running later this year if it receives regulatory approval.

Cowan said the new TMX service will help address what has long been a problem for Canadian startups that find it difficult to secure the money they need to develop. …

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