Urges the Ministry of Finance to Implement Recommendations
Toronto, January 25, 2021 – Today Save Canadian Mining is congratulating the Capital Markets Modernization Taskforce (the “taskforce”) on the publication of their final report to Ontario’s Minister of Finance.
“It is great to see that a number of recommendations were added to the draft report they published in the Fall,” said Terry Lynch, Executive Director of SCM. “We were pleased to share the story of junior mining companies throughout this review process, and our coalition is proud of the results of this work,” said Lynch.
One of the notable additions to the final report was a new recommendation addressing the settlement of short sales. Unlike in the US, Canada’s markets allow for “naked short selling,” a practice that allows for the short-selling of tradable assets without first borrowing the security. In 2008, the Securities and Exchange Commission (SEC) in the US banned what it termed “abusive naked short selling,” yet it remains legal in Canada. Through their recommendations, the taskforce has called on the ministry to close a key loophole related to this.
“SCM urges the ministry of Finance to support capital formation for junior issuers and implement these changes to the Securities Act as soon as possible. It is critical for our sector that these structural changes happen. Junior miners have been victims of regulatory loopholes and algorithmic and high frequency traders for too long,” said Lynch. “We look forward to working with the Ontario government on implementation and as they look to make Ontario a more attractive place to invest.”
SCM was launched in November 2019 to unify Ontario’s junior mining sector in requesting regulatory changes to Ontario’s capital markets. The organization is supported by the TSX Venture Exchange, the Ontario Mining Association, the Ontario Prospectors Association, as well as mining industry leaders like Eric Sprott (Sprott Mining Inc.), Sean Roosen (Osisko Mining Inc.), Keith Neumeyer (First Majestic Silver Corp.), and Rob McEwen (McEwen Mining Inc.), and over 3,000 supporters through its online campaign (www.savecanadianmining.com).
Since SCM’s launch, the Ontario government has publicly acknowledged that a review of the Securities Act was overdue, launched a review of the Securities Act, appointed a taskforce to consult with stakeholders, and has pledged to remove barriers to growth for small businesses trading on public exchanges.
“Predatory short selling has been an issue in the mining sector for a long time. The taskforce report is a good signal to our industry and we support the work that SCM will be doing to encourage government to implement these recommendations,” said Chris Hodgson, CEO of the Ontario Mining Association.
“Our members have been particularly hard-hit by predatory short selling. By addressing this, the taskforce has provided hope to junior mining and exploration companies. We encourage the Ministry of Finance to implement these recommendations in a timely manner,” said Garry Clark, Executive Director of the Ontario Prospectors Association.