What is NEX
NEX is a separate board of directors from the TSX Venture Exchange which provides a unique trading forum for listed companies that no longer meet the current listing standards of the TSX Venture Exchange. The NEX is designed for companies that have a low level of commercial activity or that have stopped active activity. It benefits these companies by giving their shares a degree of liquidity and by providing visibility that can attract potential buyers or investors. These companies are identified by an extension “H” or “K” to their trade symbols.
BREAKING THE NEX
NEX was launched as a subset of the TSX Venture Exchange, a Canadian exchange headquartered in Calgary, Alberta. The TSX Venture Exchange is a public venture capital market that allows investors to invest in small and emerging companies. The TSX Venture Exchange was previously known as the Canadian Venture Exchange before being acquired and renamed by the TSX Group in 2001. The TSX Group was renamed TMX Group shortly after. The Canadian Venture Exchange and the TSX Venture Exchange have focused on companies that are too small to list on the Toronto Stock Exchange, which also belongs to the TMX Group.
Prior to the launch of NEX by the TSX Group, companies that could not meet the criteria for continuous listing on the TSX Venture Exchange were designated as “inactive” and had 18 months to meet the listing standards or be struck off. on the side. The introduction of NEX relieved these companies of the enormous pressure of delisting and gave their management and shareholders another opportunity to turn things around. Companies that do not meet the TSX Venture Exchange listing requirements are generally transferred to the NEX board of directors after 90 days. They can remain on the NEX card indefinitely. Companies that have never been listed on the TSX or the TSX Venture Exchange cannot be listed on the NEX.
Pros and cons of NEX
NEX has lower listing fees and simplified rules compared to the TSX Venture Exchange.
Companies listed on the NEX table tend to have low levels of business activity compared to those on the TSX Venture Exchange. The companies on the NEX board of directors remain listed on the stock market even as they reassess their commercial strategy. However, some of these companies may not be able to do this successfully.
It is important to note that NEX companies must continue to comply with the same disclosure standards applicable to all Canadian public companies and must also maintain their status with the relevant Canadian securities commissions.