worlds top stock exchanges for mining companies have said
that they will not consider relaxing listing requirements in
order to get their equity markets moving, despite the climate
of stagnation for resource-related initial public offerings
IPO activity among mining companies on the Toronto, Australian
and London exchanges experienced one of its worst years in
almost a decade in 2013, as the recoiling of investors from
commodities desiccated financial liquidity for exploration
|The world's top mining exchanges such as the
Securities Exchange have said that giving the green
to looser listing rules would unduly risk investor
during the 20th Mining
Indaba Conference in Cape Town last week, representatives
from the TSX, ASX and LSE, which together account for the vast
majority of mining equity capital raised worldwide, said that
loosening the rules to make it easier for new companies to list
would unduly risk investor protection.
"It would be
very difficult to relax the level of regulation for new
listings," Graham Dallas, head of business development, EMEA,
for the TSX and TSX-Venture Exchange (TSX-V) told IM.
"We have made
some small changes around things like the way rights issues are
managed; but the level of investor protection that is achieved
through the TSXs regulation is very valuable," he
TSX stands firm on listing
With a total
of more than 1,600 listed mining companies, the TSX and TSX-V
jointly hold a dominant share of small to mid-sized mining
companies, and therefore felt the full force of the collapse in
January and November last year, just 62 mining companies listed on the TSX and
TSX-V, compared to 129 listings during the same period in 2012,
and more than 200 in each of the preceding two years.
in an effort to boost Canadas beleaguered resource
finances, TSX-V president, John McCoach called on the
countrys securities regulators to relax rules barring
retail investors from participating in private placements for
Canadian small cap companies.
While this proposal remains under consideration, the exchange
has made clear that any similar slackening of listing
requirements is not on the cards.
Martine Valcin, director of listed issuer services for the TSX,
the exchanges regulations are the "bare minimum" that a
company can be expected to comply with in order to gain some
liquidity on the Toronto investment market.
company has been listed, there is more the TSX can do to help
them access capital," Valcin explained to IM.
that when conditions on the stock markets are difficult, the
TSX tries to be "as flexible as possible" by creating
exemptions for companies who meet certain criteria in order to
streamline the listing process.
stressed, "we need to preserve the quality of the market to
protect investors and investor confidence."
Australia-based junior accused the TSX, banks and regulators of
having "no mercy", when it came to helping small companies to
if youre a BHP [Billiton], or one of the big boys, but
things are not getting better for smaller companies in
fact, theyre getting worse," said the CEO, speaking from
the floor at Indaba.
have successfully listed and raised capital on the Toronto
market in recent years were however in favour of maintaining
the exchanges present IPO requirements, which are backed
by Canadas renowned National Instrument 43-101: Standards
of Disclosure for Mineral Companies (NI 43-101).
"The TSX is
one of the most regulated markets on earth, and NI 43-101 is
recognised as the most rigorous disclosure requirement for
mining companies on making statements to the market," said
Michael Jones, CEO of Platinum Group Metals.
out a clear message to investors: If you want to play in this
sand box, youve got to be a grown up," he added.
ASX stresses need for
In Australia, 2013 was also
a difficult financial year for the resource industry, with
mining and metals firms accounting for just 16%, or 14, of the
85 new listings on the ASX last year.
worlds third largest pool of investable funds, and with
1,000 listed resource companies making up 51% of its overall
listings profile, the ASX goes head-to-head with the TSX for
much of its small to mid-cap mining business.
havent suffered as badly as the Toronto market,
James Posnett, manager for listings business development
at the ASX, told IM, but
thats not to say its been easy for mining companies
that while it was important not to go too heavy on
regulation, investors look to robust listing requirements to
give them confidence to put money into newly listed stock.
of regulation, the ASX is somewhere between the US and
Londons AIM market, he explained.
the benefits of an ASX IPO is that, once a company has floated,
it has a main board listing, so there is no ambiguity in terms
of compliance. Compare this to the TSX or London exchange,
which have the TSX-V and AIM for small caps, and we believe
that the ASX listing situation is simpler, Posnett
assistant manager, listings compliance for ASX Perth, said that
while the exchange demands a high level of regulatory
compliance for new listings, it is important to make the
listing process as smooth as possible to encourage companies to
float and for investors to support IPOs.
not need to have a minimum number of Australian-resident
shareholders in order to list on the ASX," she said, adding
that if a company is considering a dual listing with a
different exchange as their primary market, the ASX may grant
certain waivers, particularly in terms of reporting
reporting requirements are governed by Australias Joint
Ore Reserves Committee (JORC) Code, which Posnett described as
being less prescriptive than NI 43-101, while
affording investors the same level of confidence.
London looks for
London lags both the TSX and ASX by some distance when it comes
to mining company listings, the London Stock Exchange
(LSE) and small cap AIM market are distinguished by the depth
and diversity of liquidity they offer resource companies.
international associate, equity and capital markets, the London
market presently has over $1.2 trillion in assets under
management and, unlike the TSX and ASX, does not rely on a
domestic concentration of investors for investment capital.
acknowledged, however, that despite the LSEs access to
geographical diversity in terms of funding, the exchanges
mining listings business had suffered along with the Canadian
and Australian markets.
We cannot pretend
that the IPO market is going very well, but we are seeing a
sustainable level of activity," Broglio said.
Mulhern, partner for corporate and capital markets, at
international law firm, Proskauer, said that while London was
not an easy place to list, it is the most
sensible of the top mining exchanges in terms of its
approach to regulation.
miners looking at listing and the IPO process, they need to
have three things clear: disclosure, transparency and corporate
governance, Mulhern said.
She noted that
while gaining a listing and successfully raising equity on
Londons markets was no mean feat, having a clear equity
story and ensuring that corporate strategy is transparent to
investors, meant that the LSE could be a very good
place to raise money for mining projects.