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Globe says CSE could take hit over U.S. pot assets

2017-08-11 09:03 ET - In the News

The Globe and Mail reports in its Friday edition that TMX Group is considering a move that could make it harder for investors to buy and sell shares of marijuana companies with U.S. assets. The Globe's Christina Pellegrini quotes TMX chief executive officer Lou Eccleston as saying that the TMX's Canadian Depository for Securities (CDS) might refuse to clear and settle trades in these stocks. Such a move by CDS would have far-reaching implications, handicapping those stocks that are listed not only on the two stocks exchanges owned by TMX but also on rival markets, such as the Canadian Securities Exchange. The CSE has made a name for itself as a hotbed for pot stocks. The venue has attracted almost 50 listings in the nascent cannabis sector, including about 10 with exposure to the United States. It counts on these companies to propel its trading business: So far in 2017, 52 per cent of the volume on the CSE is in trading of cannabis stocks. A move by the clearinghouse to stop handling trades of some cannabis stocks could raise the spectre of a potential conflict of interest for TMX Group, which competes with the CSE for listings and trading. The CSE do not have the same listings requirements as TMX's exchanges.

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