CSE & NSX | Unlocking Australian Capital for Canadian Issuers | The CSE Podcast E10-S5

My name is Richard Carlton. I'm the Chief Executive Officer of the Canadian Securities Exchange. And we're coming to you this afternoon from PDAC 2026 in Toronto. Max Cunningham, Managing Director and CEO of the National Stock Exchange of Australia, live from PDAC 2026.

So we completed the acquisition of the National Stock Exchange of Australia in the end of October of 2025. Since that time, we've been uh working with Max and his team in uh in Australia to develop um a venture market for uh Australians. And originally uh when we went into this transaction, we thought that uh Australia, which of course generates a tremendous number of early stage uh companies across the mining, life sciences, technology spaces, uh would be the source of the uh initial business.

But we've had tremendous interest from the Canadian market and international mining companies in particular, who are interested in accessing uh capital in Australia through a uh a dual listing or a listing on the National Stock Exchange. So that involves a lot of work in terms of uh making sure that the rule books are properly harmonized with each other. We have to work with the regulators to make it as easy a process as possible. So mundane things like the fact that Canadian companies currently report quarterly.

In Australia, if the company is a relatively mature one, they actually only report semi-annually. So, how do we harmonize uh you know the reporting obligations, for example, across the uh two sets of uh practices and procedures? So a lot of those things are being worked through. We have some companies in the pipeline uh that are looking to list.

And as I say, the pickup seems to be um from the international companies first. We'll build a critical mass of companies and continue to build that uh cohort uh on the NSX in Australia, uh, as they say, become a relevant and important part of capital formation for junior companies uh in Australia. Yeah, look, I'll add on firstly what Richard said. And I think what do you want from a stock exchange?

Stability, credibility, and I think that's what CSE buying NSX, taking the business private, has done immediately. I mean, in the period since we last saw you in Perth, uh, we've had a record number of new brokers signing us as supporting participants. Uh, and we're now getting something we really haven't had before, and that's inbound calls from issuers. Uh, so look, I think from our perspective, capital markets are still very, very, I would say, on edge.

Um, yes, there were some big IPOs in Australia last year. Um, I would regard them as the exception rather than the rule. Uh, we've gone back to an interest rate uh tightening environment in Australia. I think that'll last for several years.

Um, but nevertheless, um, the asset classes are still what people want. You know, gold is hot in Australia, uh, copper uh is being sought after. Uh we've had conversations uh with CSE issuers in asset classes that we don't have in Australia, like silver. So I think to Richard's point, um there's interest, there's there's increasing interest uh from Canadian issuers.

We saw that in Beaver Creek. We're seeing it here in Toronto. We expect that to continue. Companies moving across from ASX, uh, new asset classes like digital assets, and some selective IPOs.

So we're we're we're we're very optimistic about the next 12 months. I think um the reason uh Canadian issuers want to move to Australia and and is it's it's it gives them optionality to raise additional capital. Now, there are periods of valuation arbitrage where certain asset classes are uh trading at a higher value in Australia or Canada. So that's a good reason to have that firm footing.

But of course, we've still got that huge superannuation uh system uh you know that's growing. And people in this inflationary environment, in economic uncertainty, uh like the idea of hard assets, and certainly you know what what we're seeing in terms of the the mining sector. Uh uh I think everyone's observed this is a huge PDAC, and we saw that in um in Beaver Creek as well. Um this this is a uh multi-year cycle, and I think people uh in Canada see an opportunity to raise fresh capital in Australia primarily.

Again, as dynamic an economy Australia is in non-mining sectors, uh certainly from a capital markets perspective, it is very much in the current cycle a mining story. And uh Max referred to the superannuation funds. It's amazing. Large pension funds that are still buying individual stocks, something that is unknown essentially here in Canada.

Uh, and that of course breeds a very sophisticated uh process for analysts and specialty fund managers and so on. And um, again, uh it's an important source or potential important source of capital for Canadian issuers or companies internationally that are looking to access that capital. So, again, very interesting market for international folks, especially since I mean Max uh referred to it, the Australian dollar is actually appreciating against the basket of developed market currencies quite dramatically, about 10% or so in the last uh seven, eight months.

That all by itself implies an increase in the value of the uh uh valuations uh that the companies are enjoying. So you combine that with the opportunity to raise capital domestically in Australia, uh, it's a very attractive jurisdiction to do business. Yeah. Yeah, well, I think we still think Canada is a model uh and CSE is the best exemplar for venture markets.

You know, the incumbent exchange you know continues to tilt towards larger caps, um, and that is leaving a gap for uh startups, for higher risk companies, importantly for investors to take those, um, to take those opportunities and uh uh you know take risk and create new wealth. So um uh that's that's really what we're trying to create in the in Australia. We're at multi-decade lows for the number of listed companies. Um that is particularly, the pain point is particularly pronounced when it comes to juniors.

Um and uh I think when we when we talk to policy makers in Canberra, when we talk to the regulator, uh we we we we get encouragement that this is this is the they want competition, but more importantly, they want the future growth companies of uh the future for Australia coming through the public market pipe. And and really it's interesting in Canada, there's been a lot of talk about the decline in the number of public companies listed on the markets. But of course, when they do that, they're looking at the TMX group exchanges only.

And I like to call the reporters and I say, I know where those companies went. And they'll say, Really, where, where? And they say, Well, we got them. And the truth of the matter is that because we focused on that early stage part of the market, we've had success in bringing up to roughly 750 companies at uh the present time.

Uh, you add that to the ones that uh are located across the street in CBOE Canada. In fact, the picture isn't nearly so bleak. So, what that does is underscore the importance of focusing on that early stage market and encouraging those companies to come in and provide those opportunities to investors uh during their fastest growth and uh uh wealth creation phases. What I will tell you is that we were encouraged every step of the way by the Australian regulators uh in the completion of the transaction that we did.

And so uh they obviously had to do a review, so due diligence on the CSE, the management team, our shareholders, and so on. And uh, you know, those processes can sometimes, in a number of places, drag on for an extensive period of time. And uh, in fact, the regulators were extremely diligent, worked through uh all of the things they needed to do in uh in a very, very short period of time, by my experience. And uh that really facilitated the completion of the transaction in a timely fashion.

And look, I think uh it this is coming at a time, of course, where whilst there is geopolitical uncertainty, you know, on the on the on the political front, uh the Canadian and Australian governments are probably the closest they've been for uh multi-decades, I would suggest as well. Yeah. I think for us, the biggest thing is locking down our uh technology trading platform and the optionality uh that will that will give us. So we're uh we're days away uh from signing on that, briefing the regulator, briefing the marketplace on that.

But really, we we are highly, highly confident that the system that we're putting in place uh will uh be the most contemporary uh uh trading engine that there is on an exchange in Australia. We've got very, very encouraging signs from the brokers that aren't connected, uh that want to come into that test environment. That's going to enable us to trade new securities. Uh and uh from our perspective, um, you know, that's that's that's the central plank of the future growth.

We're also uh planning to launch a consultation paper around the listing of companies uh that uh uh hold digital assets, whether that's treasury companies, wallets, miners. We've been working uh with the regulator on that for some time, and uh hopefully that will enable us to expand the uh you know the breadth of um you know, or bring diversity to the companies that are listed on NSX uh you know in the next uh three to six months. Well, I think it's um uh isn't a controversial statement to say that the fundamentals for the mining industry across the board, uh whether you're talking about uh the base metals, energy metals, battery metals, precious metals, have never been stronger, at least in recent memory.

And the reality of the situation is that yes, while the producing companies have had really nice valuation increases over the course of the last year and a half or so, the juniors not so much at this point. And the reason for that is we haven't seen a lot of MA activity from the senior producing companies doing acquisitions, joint ventures, or investing in the juniors at this point. We've seen a little bit. That was late last year, and that spurred some activity in the space and some asset valuation improvements.

But we are in the early, early innings of the number of companies that are going to come into the market and the valuation of the juniors who have been working for the last couple, three years have now got a solid track record of results, exploration results coming in. And I have to say, I mean, across the board, generally speaking, the results have been extremely positive. And the likelihood of commercial deposits being, in fact, developed into producing mines uh seems very high for a very large number of these companies.

Not as risky as it used to be, apparently. So maybe the the uh the science is improving. Uh, but point being is that the investment opportunities for everybody, I think this this train has not left the station by any stretch of the imagination. And uh there's there's realistic potential for tremendous growth in these companies over the next uh the next two, three years.

We've seen an increase in trading turnover, a substantial increase in trading turnover that's largely driven by the uh mining sector. Uh roughly 55% of the daily turnover, both by volume and value, uh, is in the mining sector. So that's been good. We've seen a small uptick in the number of new companies coming in.

Importantly, the companies that are already on the exchange have been extremely active in raising capital. So last year um they raised roughly one and a half billion uh and did uh seven, eight hundred transactions. So two, three transactions a day were being completed. So again, indicating that there is investor appetite uh for those uh opportunities.

And uh I think we've got nowhere to go but up uh from those numbers in the uh in the coming year. No, look, I would say uh I expect that we're gonna continue to see uh the trend of listed companies decline uh this year. We'll finish the year with the total market with less companies. Uh uh, we'll finish the company the year with more.

Um I think that the companies will continue to disappear from the large exchange at the large end and the small end. Um, and uh, but to the points Richard made, I think all the opportunities are going to be in the material sector because people want to get exposure to those assets, because the check sizes are smaller. Um, and uh and I think in a tightening rate environment, you know, these things will have a little bit of a potential inflationary hedge as well.