The TSX Venture Exchange fails to serve the interests of its listed companies according to a new survey sponsored by the upstart venture market Canadian Trading and Quotation System Inc.

The survey interviewed senior management from 332 TSX Venture listed companies. There are approximately 2,300 companies listed on the TSX Venture Exchange.

The found a level of frustration among listed companies as 52% of respondents said they do not believe they receive “good value” for the fees they pay the exchange.

Specifically, they are critical of the Venture Exchange in terms of the liquidity of their companies’ shares, responsiveness to their needs and some specific costs associated with their listing.

Approximately 32% express dissatisfaction with the liquidity of their shares. Furthermore, 33% do not feel that the Venture Exchange’s market always provides a reasonable two-sided market for their shares.

Sixty per cent believe that having a dedicated market maker would increase the liquidity of their shares, and 64% consider CNQ’s system with multiple market makers that compete against each other as an improvement.

Survey respondents expressed concern regarding client service. Forty per cent of respondents cited delays getting transactions approved by the Venture Exchange, with 19% experiencing a wait of three months or more. Another 21% have waited up to three months for their transactions to be approved.

Respondents also expressed concerns around the costs of listing on the Venture Exchange. Just under half of respondents (49%) were dissatisfied with the fees charged. The survey found that a significant point of contention relates to the Venture Exchange’s decision to charge fees for the review and approval of transactions.

“This research publicly confirms what many companies speak about privately: their current exchange does little to serve their interests. It’s clear from these findings that senior management are frustrated that their needs remain unmet,” said Paul Chalmers, EVP, Canaccord Capital Corp.

“Now that CNQ is a viable alternative, emerging companies have the opportunity to choose the exchange that offers them the best platform for growth,” said Ian Bandeen, Chairman and co-founder of the Canadian Trading and Quotation System Inc. “These findings are not surprising to us given that we constructed our model only after extensive consultations with, and focusing on the needs of, our key stakeholders. It was the critical input provided by the dealer and issuer communities that has enabled us to provide a substantially improved service to the Canadian marketplace.”

The survey’s publication coincides with CNQ’s application to the Ontario Securities Commission to become a stock exchange.

Between Oct. 28 and Nov, 7, 2003 a total of 332, 10-minute telephone interviews were conducted by Grinslade Strategy Group with senior executives of companies currently listed on the TSX Venture Exchange. The results of a sample of 332 cases are accurate to within +/- 5 percent, 19 times out of 20.

The sample for the research was regionally representative and all respondents were randomly selected to complete an interview from the total universe of companies.