What is the TSX Venture Exchange? What is its purpose? What kind of companies are listed on the exchange? How does the TSX Venture perform, should I invest in it? Do you ever find yourself asking questions like these, or maybe you’re just looking for some fun and interesting facts about the TSX Venture Exchange. Whatever the case, prepare to inform and educate yourself.
Great blog post educating on the TSX Venture. Here's the link: http://viralstocks.com/tsx-venture-exchange-did-you-know/
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Some Interesting Facts about the TSX Venture
- The TSX Venture was originally formed from the merger of the Vancouver Stock Exchange (VSE) and Alberta Stock Exchange (ASE) and wasn’t named the Canadian Venture Exchange, or CDNX until 2001 once the TMX bought it?
- The Venture is used as a springboard, allowing companies to get financing and grow so they can eventually migrate to theTSX.
- The TSX Venture has a total of approximately 2,300 companies
- Companies listed on the TSX Venture can be identified by having the letter ‘V’ after the symbol. For example: ABC.V
- The Venture is owned and operated by the TMX Group
- The materials sector makes up 48.07% of the TSX Venture. Energy makes up 40.60%, Financials make up 2.72%, health care chips in at 2.09%, industrials at 2.08% then information technology, consumer discretionary, utilities and consumer staples all coming in under 2%
- A symbol previously used by other issuers cannot be reassigned for 53 weeks.
- It takes a total of between 3-6 months to get listed on the TSX Venture with 15 different events having to take place before the listing is final
- There are 4 different ways to take a company public on the Venture exchange:
o Initial Public Offering
o Reverse Takeover
o Capital Pool Company
o Direct Listing
- An ‘Advanced Company Venture’ is an issuer listed on the Venture Exchange that has significant financial resources and satisfies the tier 1 listing standards. A tier 1 issuer benefits from a more favorable regulatory environment and increased opportunity for participation by institutional investors.
- There are much fewer advanced or tier 1 companies on the TSX Venture than tier 2 companies.
- A Capital Pool Company (CPC) is a new company trading on the TSX Venture that has no commercial operations or assets except for cash. CPC’s use their cash holdings to evaluate assets to acquire in a qualifying transaction. This must be completed within 24 months of the listing. After the qualifying transaction is complete, the company can be listed as a standard Tier 1 or 2 issuer on the TSX Venture. CPC’s can be identified by the ‘P’ after their ticker symbol.
- The difference between a tier 1 and 2 issuer on the TSX.V is the listing criteria. A tier 1 issuer is required more net tangible assets and pre-tax earnings than a tier 2 company. The exact numbers are based on the industry the company is in.
TSX Venture S&P Index Specific
- The S&P/TSX Venture Composite Index is a broad market capitalization-based index which is designed to measure the performance of securities listed on the TSX Venture Exchange, Canada’s primary venture equity market.
- The S&P/TSX Venture Composite Index has a 409 constituents
- The average constituent market cap is 0.058 billion
- The largest constituent market cap is 1.843 billion
- The smallest constituent market cap is 0.008 billion
- The market cap of the index is 23.72 billion
- Securities must be incorporated under Canadian federal, provincial, or territorial jurisdictions and listed on the TSX Venture Exchange.
- Market Capitalization: At the end of every calendar quarter, a security must have a relative weight of at least 0.05% of the total capitalization of the S&P/TSX Venture Composite Index to continue to be included in the index, after taking into consideration all share changes, additions and deletions.
- Eligible Securities: Shares other than those of capital pools and NEX issuers, preferred shares, exchangeable shares, warrants, rights, US$ denominated securities, inactive or suspended issuers and other financial instruments the Index Committee deems inappropriate are not eligible for inclusion in the index. Installment receipts are not eligible for inclusion in the index, but can be used in lieu of common share trading history.
- Shares Outstanding: All classes of common shares (excluding inactive issuers) – those issued and outstanding shares which represent the residual equity of the earnings in the company — are eligible for inclusion in the index. The number of shares of a company used for the calculation of the index will be the total shares issued and outstanding less shares held in escrow, as determined by the TSX Venture Exchange.
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