Editorial Vancouver can rise to the challenge

The Vancouver Stock Exchange for years has lived with the reputation of being a cross between a casino and a floating crap game. It’s been a mixed blessing — a gambler’s paradise, an entrepreneur’s entree into the world of high finance, and a place that the more conservative equity market players love to hate. If there wasn’t a Vancouver Stock Exchange, one would have to be invented.

Despite the reputation the vse enjoys (or endures, depending on your point of view), it plays a vital role in Canadian commerce, particularly the mining industry. It is a venture capital market unparalleled in Canada — indeed, in North America.

But the vse can’t afford to rely on its reputation to maintain its role as a global venture capital centre. The Toronto Stock Exchange and Montreal Exchange’s aggressive courting of small capital companies, particularly junior mining exploration companies, and the Ontario Securities Commission’s new regulations aimed at easing requirements for raising venture capital in Ontario threaten to siphon off some of the excitement from Vancouver.

The vse has managed to thrive for 75 years, however, and there’s little doubt it will be able to rise to this challenge of increased competition. And help may come from unforeseen quarters. The stock market crash in October, 1987, has shaken the nerves of the Eastern exchanges. After that debacle, easing the rules for junior companies suddenly lost a great deal of its appeal as an avenue to greater revenues. And the tse itself is suffering some major blows to its credibility after a spate of staff firings, including its vice-president of markets and market development.

When it comes to the high stakes world of venture capital, those kinds of unforeseen events are what separate the men from the boys.

The vse may have to make some changes, and quickly, in order to ease regulations and speed up the listing process if it wants to keep up with the competition. But there’s little doubt it will do just that. The vse will remain a global centre for venture capital for a long time to come.