A little initiative can go a long way

A got a call last year from a keen guy at the New Brunswick Securities Commission. Someone gave him my name and he wanted to chat about the lack of investment capital flowing into New Brunswick firms. The NBSC, he said, had decided enough is enough and they wanted to do something about it.

I blogged about this at the time and we had a lively debate about whether or not it’s the role of the the NBSC to stimulate investment and in fact whether it might even be some form of conflict of interest (regulator and promoter at the same time).

I said yes and still say yes. Somebody has got to figure out a way to get investment flowing into SME business in New Brunswick. The McCains and Irvings can’t beat external investment away with a stick but small firms have a lot harder time of it.

A year or so later and after reports, roundtables and, I think, two proactive conferences on the subject, the NBSC was rewarded by its peers at the Canadian Investment Awards last night with the:

Best New Initiative Award
Fostering Capital Markets in New Brunswick
(New Brunswick Securities Commission)

Now, I have to say for a New Brunswick regulatory agency like this to win a national award is pretty friggin’ amazing. I suspect that Louisbourg or others may have won awards in the past but for the government to win a ‘best new initiative’ award, I think that is fantastic.

I’d like to think that the government of the day – Lord/Volpe/Mesheau- went to the NBSC and provided leadership on this initiative but I am told this was an internally generated effort. The folks at the NBSC decided they were tired of presiding over the worst capital market in Canada and did something about it.

Now, I think it’s too early in the game to assess ‘results’ which will be the ultimate measure of this initiative’s success. But it can’t hurt for an NB government agency (not named Tourism) to win some form of national award and not within some government only association. Any firm in the financial sector can win this specific award.

Congratulations, NBSC. Pat yourself on the back. Tinkle the glass.

Then go to back to work.

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0 Responses to A little initiative can go a long way

  1. Anonymous says:

    Wow, you think its a conflict of interest until they do it so well they win an award for it? Boy does your moral compass have a rubber arm!

    That’s wrong about Irvings, they had to team up with Repsol for the LNG terminal, a company even more corrupt than they are, which is being sued by its own shareholders and whose incompetence has it thrown out of countries and board members imprisoned. So far there’s no takers on a refinery, which is basically a money printing machine, you’d think that companies would be lining up. But that’s not the case. These guys are simply so creepy that most companies don’t want to go near them, or the province they own.

    Back to NBSCC, I would agree that its that same rubber arm morals that got them this award. Let’s take a look at what they are SUPPOSED to do:

    • educates investors and informs users of capital;
    • provides registration services for dealers and advisers;
    • reviews issuers’ prospectuses and other ongoing disclosure documents;
    • considers applications for exemptions from specific regulatory requirements;
    • oversees enforcement and regulatory activities of self-regulatory organizations;
    • investigates complaints and prosecutes violations of securities legislation;
    • holds administrative and adjudicative hearings;
    • formulates policy;
    • provides advice to government on matters within the Commission’s regulatory mandate.

    Do you see ‘foster growth’ in there anywhere? Now let’s look at one of their ‘taken on’ missions:

    “We see our role as a catalyst, bringing interested stakeholders together to not only identify issues, but more importantly, to
    develop solutions and to become engaged in their implementation.”

    Try to match that up with one of their stated aims. Thanks for that research, because I think a little more research is necessary and we should start a publicity campaign. It’s certainly no problem for the government to set up a commission or department whose goal it is is to increase equity markets, lord knows this governments solution to every problem is to make a department for it.

    But as you say, having a regulator also in charge of ‘fostering’ equity markets is a BAD idea. There is one thing worse than doing nothing, and that is doing something wrong.

    Why they got this award is obvious, they are signalling that NB is willing to be just as crooked as anybody else. That’s a BIG step, and industry notices things like that, hence the award. Go look at what they’ve actually DONE, they have DONE anything, they’ve only basically said they are willing to do whatever it takes.

    According to their research, NB has a grand total of 6 companies listed in Toronto, barely ahead of last place PEI with zero, and well behind Nova Scotia with 26. Of course its obvious why, because family businesses still run most of the province.

    The ‘market capitalization’ benchmark shows industry vitality and while Ontario and Alberta are up in the 120% range, NS is down in the 32% range, but still beats NB’s 17%.

    Yet for further study, you might want to look into an interesting fact, which is that NB seems to be fourth in Venture Capital funding and Early Growth Funding,well ahead of Alberta and Nova Scotia. So the question is, where do those funds come from, and where are they going? The Commission maintains it is just in a small group of companies, but doesn’t say which ones.

    Something else of interest that could certainly be blogged about since it reflects policy is that the commission notes that funding sources are most problematic in the $200,000 and $1.5 million range. It also notes that this is not exclusive to New Brunswick.

    So here’s a thought, tailor provincial funding sources to that level to attract external companies having trouble. The other alternative is to provide the services that are most necessary at those levels for the companies in exchange for equity.

    Just for interests sake, you can watch the Dragons Den to see what kind of ideas need funding at those levels.

    But back to the organization, anybody who ISNT erring on the side of caution should note that the commission is essentially paid by the investment firms. My personal opinion, like yours, is that they shouldn’t be partaking in growth but in regulation. The award is symptomatic of that. Keep in mind that while canadians just love their lillywhite image, the Alberta and Vancouver Stock Exchanges are well known as among the most criminal in the world, bordering on vehicles for organized crime. This is BECAUSE the “regulators” don’t regulate, just as if you had a judicial system that refused to use cops and lawyers.

    New Brunswick is signalling that it is interested in operating in the same manner, and this award should raise alarm bells.

  2. Anonymous says:

    PS I noticed their report lists a David Campbell who is barred from actively trading, that’s not you is it:)

  3. David Campbell says:

    Caught in the act! Just kidding. There are dozens of David Campbells in New Brunswick and I am not one that has financial experience.