NEX: What It Is and How It Works

Overview

NEX is a separate trading board of the TSX Venture Exchange that provides a marketplace for companies that no longer meet TSX Venture’s ongoing listing standards. It is intended for firms with very low business activity or that have ceased active operations. NEX gives these companies continued public trading, limited liquidity and visibility that can help attract potential acquirers or investors.

Key points
* Companies moved to NEX typically carry an “H” or “K” extension to their trading symbol.
* Firms are generally transferred to NEX after ~90 days of noncompliance with TSX Venture standards and may remain there indefinitely.
* Companies that have never been listed on the TSX or TSX Venture cannot list directly on NEX.
* NEX companies must continue to meet Canadian disclosure requirements and maintain good standing with securities regulators.

Background

NEX was created as a subset of the TSX Venture Exchange to replace prior “inactive” designations and to remove the immediate delisting pressure that earlier came with missing continuous-listing criteria. The board allows management and shareholders additional time and a public venue while they reassess strategy, seek financing, or negotiate deals.

How NEX works

• Transfer criteria: When a company fails to satisfy TSX Venture’s ongoing listing requirements, it is typically moved to NEX after a specified period (commonly about 90 days).
• Listing status: Companies on NEX remain publicly traded but are separated from companies that meet TSX Venture standards.
• Ongoing obligations: NEX-listed issuers must comply with the same disclosure rules applicable to Canadian public companies and remain in good regulatory standing.

Costs

NEX is designed with lower ongoing costs than the main TSX Venture board. It charges a modest quarterly listing fee (noted industrywide in guidance as a small fixed quarterly amount), whereas listing and sustaining fees, plus filing fees on TSX Venture and TSX, are substantially higher and more variable. The lower fee structure is intended to keep marginal issuers public while they attempt to recover or execute exit strategies.

Advantages and disadvantages

Pros
* Provides continued liquidity and market presence for marginal or dormant issuers
* Lower ongoing fees and simplified administrative requirements compared with primary TSX boards
* Keeps the company visible to potential acquirers or financial partners

Cons
* Issuers remain subject to full disclosure and regulatory obligations
* Companies on NEX are generally higher risk and may face a greater chance of eventual delisting
* Reduced market activity and investor interest relative to the main TSX Venture or TSX boards

Trading hours

NEX trading follows regular TSX Venture market hours: 9:30 a.m. to 4:00 p.m. ET on business days.

NEX (Canada) versus NEX Group (U.K.)

The Canadian NEX board is part of the TMX Group’s TSX Venture Exchange. It is not affiliated with NEX Group — a separate U.K.-based firm (formerly ICAP) that provides electronic markets and post-trade services and is listed on the London Stock Exchange under the ticker NXGN. The two are distinct entities with different businesses and markets.

Bottom line

NEX provides an alternative public venue for companies that no longer meet TSX Venture’s continuous-listing criteria. By offering lower fees and continued market access, NEX gives marginal or dormant issuers time and visibility to pursue recovery or exit options, while investors should be aware of the higher risk profile of NEX-listed companies.