What is 'TSX Venture Exchange'

TSX Venture Exchange is a stock exchange in Calgary, Alberta, Canada that was originally called the Canadian Venture Exchange (CDNX). It resulted from a merger between the Vancouver and Alberta stock exchanges. TSX Venture Exchange also has offices in Toronto, Vancouver and Montreal.

BREAKING DOWN 'TSX Venture Exchange'

The goal of the TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. This exchange mostly contains small-cap Canadian stocks. It is owned and operated by the TMX Group.

There are over 1,600 companies listed on the TSX Venture Exchange with nearly 400 included in the S&P/TSX Venture Composite Index. Companies listed in the composite index are primarily mining (53%) and traditional energy (15%) companies, while the majority of them are located in British Columbia, Alberta and Ontario, where these industries have prominent operations.

The most popular stocks on the TSX Venture Exchange are grouped into an index known as the TSX Venture 50, a group of strong performers from clean energy, diversified industries, mining, oil/gas, and life science sectors. Companies are selected for this index based on several criteria, including a market capitalization of greater than C$5 million, closing share price of greater than C$0.25, listing for more than one year, and a share price of at least C$0.10 the year before.

There are two main avenues for American investors to invest in TSX Venture Exchange listed companies:

  1. U.S. investors can purchase stocks traded on the TSX-V directly using brokerage accounts that support trading on foreign stock exchanges. This includes many  online brokers in the U.S..
  2. Many TSX-V companies are dual-listed in the U.S. as American Depository Receipts, making it possible for U.S. investors to purchase them on U.S. exchanges. But, investors should be aware that these ADRs may be less liquid than their TSX-V counterparts.

History of TSX Venture Exchange

The Canadian Venture Exchange started on November 29, 1999, as a result of an agreement among the Vancouver, Alberta, Toronto and Montreal exchanges to restructure the Canadian capital markets along the lines of market specialization.

The focus of the CDNX was smaller companies, whose assets, business and market capitalization were too small to be listed on the Toronto Stock Exchange. A large number of the companies on the exchange were resource exploration companies, but new high technology ventures were also listed. The exchange had its corporate headquarters in Calgary, Alberta, and its operations headquarters in Vancouver, British Columbia, with additional offices in Toronto and Montreal. The Winnipeg Stock Exchange and the small-cap portion of the equities market of the Bourse de Montréal (MSE) were also later merged into the CDNX.

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