Title: What Is the NEX? — A Complete Guide for Companies and Investors
Key takeaways
– NEX is a separate board of the TSX Venture Exchange (TMX Group) for companies that no longer meet TSX Venture’s continuous listing standards but wish to remain publicly traded.[1][2]
– NEX-listed companies typically have low or suspended business activity; they are identified by an “H” or “K” extension on their trading symbols.[1]
– The NEX offers lower fees and simplified rules versus TSX Venture, but stocks are generally riskier and less liquid.[1]
– Trading hours: 9:30 a.m. to 4:00 p.m. ET on business days.[1]
Understanding the NEX
– Purpose: NEX is a “parking” or remedial board that preserves a public market for issuers that have failed to meet ongoing listing requirements on the TSX Venture Exchange. It was introduced to give these issuers flexibility and time to reorganize, find a buyer, or otherwise pursue a path back to active status.[1][2]
– Eligibility: Only companies that were previously listed on TSX or TSX Venture may be moved to NEX. A company that fails to meet standards is typically moved after a prescribed period (commonly about 90 days) rather than being immediately delisted; once on NEX a company can remain indefinitely provided it complies with NEX rules and disclosure obligations.[1]
– Disclosure and regulatory obligations: NEX companies must continue to meet Canadian public-company disclosure standards and remain in good standing with securities regulators even while on the NEX board.[1]
Fast fact
– NEX-designated issuers will often carry an “H” or “K” symbol extension to their ticker to signal reduced business activity or halted operations to investors.[1]
Costs for listing on the NEX
– NEX charges a modest quarterly listing fee (reportedly US$1,250, payable the first business day of each quarter).[1]
– By comparison, TSX Venture and TSX primary listings have substantially larger fees and more extensive filing and sustaining fee schedules (TSX Venture and TSX fee ranges are materially higher and can include review-related filing fees).[1]
– The fee structure for NEX is intended to be competitive with other emerging-market boards and to reflect the simplified oversight regime.[1]
Advantages and disadvantages of the NEX (summary)
Advantages
– Provides a continued public listing and trading venue for struggling or inactive issuers, maintaining visibility for potential acquirers or investors.[1]
– Lower listing costs and simplified ongoing requirements relative to TSX Venture or TSX main board.[1]
– Removes immediate delisting pressure, allowing management and shareholders time to restructure or seek alternatives.[1]
Disadvantages / Risks
– Issuers on NEX typically have limited or no active business activity—higher business and solvency risk for investors.[1]
– Liquidity is often poor, and price discovery can be weak; trading spreads may be wide.[1]
– Being on NEX may signal material issuer distress to the market, which can impair future capital-raising prospects.[1]
Pros and cons of listing on the NEX (for issuers)
Pros
1. Continued access to a public market at lower ongoing cost.
2. Time to pursue strategic options (sell assets, restructure, find financers/acquirers).
3. Reduced compliance burden compared with active TSX Venture listing requirements.
Cons
1. Market perception of diminished credibility; potential loss of investor confidence.
2. Reduced liquidity can make future financings or exits more difficult.
3. Still subject to public disclosure and securities regulation obligations—failure to comply can lead to further enforcement or delisting.
What are the NEX exchange trading hours?
– Trading hours for NEX-listed securities follow the TSX Venture hours: 9:30 a.m. to 4:00 p.m. Eastern Time on business days.[1]
What is NEX in the U.K.?
– Note: NEX (TMX/TSX Venture) is distinct from NEX Group (a UK-based electronic markets/post-trade services firm formerly known as ICAP’s electronic broking arm). They are separate entities and not affiliated. The TMX-owned NEX is the Canadian board described above; NEX Group (UK) is a financial-services company that has historically traded on U.K. exchanges under separate tickers. Check corporate filings for the most current status of any U.K. entity.[1][3]
What is the market value of NEX?
– NEX, as a board, does not itself have a market capitalization; it is part of the TMX Group exchange ecosystem. Individual issuers on NEX each have their own market caps, which vary widely. By contrast, references to “NEX Group” (the U.K. firm) reflect a corporate market capitalization for that company at specific points in time and are unrelated to the NEX board of TSX Venture.[1][3]
– For up-to-date market-cap figures for TMX Group or any listed company, consult current market data sources.
Practical steps — For companies considering NEX
1. Assess status and timeline
– Determine whether your issuer is in non-compliance or at risk of losing TSX Venture standards and confirm the timeframe (e.g., 90 days before NEX transfer) with your exchange relationship manager.[1]
2. Review disclosure obligations
– Ensure that management understands the ongoing disclosure and securities-commission filing obligations that apply while on NEX.[1]
3. Prepare a strategic plan
– Determine objectives while on NEX (restructure, find buyer, raise financing, rehabilitate operations) and set milestones and timelines.
4. Engage advisors
– Retain legal, accounting, and corporate-finance advisors familiar with NEX rules and remedial processes.
5. Apply and comply
– Work with the exchange to complete any paperwork required for transfer to NEX, pay the required fees (quarterly NEX fee), and meet any board-specified undertakings.[1]
6. Keep stakeholders informed
– Communicate regularly and transparently with shareholders and creditors about strategy and material developments.
7. Pursue reactivation (if applicable)
– If the plan is to return to TSX Venture or another exchange, follow the re-listing/qualification pathway when operational and financial thresholds are met.
Practical steps — For investors evaluating NEX-listed stocks
1. Confirm listing status and symbol extension
– Check for the “H” or “K” extension and read exchange notices about the issuer’s status.[1]
2. Read all filings and continuous disclosure
– Emphasize recent management discussion, going-concern notes, cash runway, and related-party transactions.
3. Assess liquidity and trading history
– Examine average daily volume and bid-ask spreads; low liquidity increases execution risk.
4. Evaluate the recovery plan
– Is there a credible business restart, credible buyer interest, or asset value likely to be realized? Look for concrete milestones.
5. Understand downside risks
– Consider scenarios that lead to delisting, insolvency, or shareholder value dilution.
6. Use position sizing and risk controls
– If investing, size positions conservatively and consider stop-loss or hedging strategies where appropriate.
7. Seek professional advice
– For complex situations (insolvency, distressed debt/equity), consult legal or financial advisors.
The bottom line
NEX is a specialist board within the TMX/TSX Venture ecosystem created to give previously listed Canadian issuers a lower-cost, remedial public venue when they no longer meet active listing standards. It preserves liquidity and visibility but comes with higher investment risk, often low trading volumes, and a public signal that a company is distressed or inactive. Companies and investors should carefully evaluate goals, disclosure obligations, liquidity, and potential exit or recovery paths before using or investing in the NEX market.[1][2]
Sources
1. Investopedia. “NEX.” https://www.investopedia.com/terms/n/nex.asp
2. NEX (TMX/TSX Venture) — About/Introducing NEX pages (TMX Group). (See TMX Group / NEX official site for current program rules and fees.)
3. Investing.com. “NXGN (LON) — NEX Group PLC” (market data reference for the U.K. NEX Group entity). https://www.investing.com/equities/nex-group-plc
If you’d like, I can:
– Draft a sample investor checklist or due-diligence worksheet for evaluating a specific NEX-listed company; or
– Draft a step-by-step application checklist (and required documents) for an issuer preparing to transfer to NEX. Which would be most useful?