Government orders VSE investigation

The former president of the Business Council of British Columbia will have six months to complete a review into the roles and regulatory responsibilities of the Vancouver Stock Exchange (VSE) and the British Columbia Securities Commission.

James Matkin’s report will give the government an independent look at the exchange and the progress made by the Securities Commission since its creation in 1987, said B.C. Finance Minister Glen Clark.

“There have been positive developments in recent years,” Clark said. “However, it’s obvious to me that the VSE can’t seem to shake its reputation as a haven for fraudulent and abusive practices.”

Clark said the review is intended to be positive and is not a “witch-hunt” for judging individual cases of regulatory abuse. The commission is expected to examine the self-regulatory nature of the VSE and make specific policy recommendations on how its regulation can be improved. The role of promoters will also be examined, as will the adequacy and effectiveness of civil remedies and offence provisions available under the Securities Act. Matkin’s commission will have powers of subpoena.

For the most part, news of the review was welcomed by long-term observers of the Exchange, albeit with some reservations.

“The review has the potential to be a positive thing, particularly if it is held in public,” said John Woods, editor of Stockwatch. “But the time frame is definitely not sufficient and it is fanciful to expect anyone to understand the inner workings of the Vancouver Stock Exchange in just six months.”

The VSE issued a public response, stating the Matkin inquiry offers “a constructive opportunity” for an objective assessment of reforms introduced by both the Exchange and the Securities Commission “and for consideration of what else should be done.”