The B.C. company that allegedly presented itself to Chinese investors as a revived version of the old Vancouver Stock Exchange – drawing the ire of the BC Securities Commission (BCSC) – says it has done nothing wrong.
Zilin Wang, director of the Vancouver Stock Exchange Corp. (VSEC), said when reached via one of his company’s Chinese phone numbers that while his company aims to eventually create a stock exchange in Vancouver, its current operations involve getting Chinese companies listed in other markets like Nasdaq or the Toronto Stock Exchange (TSX).
As such, Wang said he believes VSEC is outside of BCSC’s jurisdiction.
“We welcome the BCSC to contact us if they have any concerns, and we have been in touch in the past,” Wang said, adding the company is registered on BC Registries and Online Services. “When what we do legally requires us to go to the BCSC for permission, then we would comply 100%. The fact is, we are 100% legal.”
The BCSC warned investors earlier this month that VSEC has been issuing stock exchange listings to companies in China and B.C. while presenting itself as the old Vancouver Stock Exchange (VSE). The VSE merged with the Canadian Venture Exchange (now the TSX Venture Exchange) in 1999.
The description on the VSEC website (www.vcvse.com) at one time claimed it was the successor of VSE and is one of the four largest stock exchanges in North America, along with the Nasdaq, the New York Stock Exchange and the TSX. (The description has since been removed, although the company continues to claim it is the successor of the VSE launched in 1906.)
In its release, the BCSC said VSEC claims to have offices in Kitimat and Shenzhen, China. On its website, the VSEC lists the Kitimat Hotel as its B.C. address. Records show the director of the hotel as Wang.
A senior BCSC spokesman said that – regardless of the location of offices or markets – any company operating as a stock exchange must either be recognized by the BCSC or obtain an exemption; VSEC has done neither.
“We have granted a handful of exemptions of recognition over the years, but usually the basis of that recognition is that you are regulated in another jurisdiction,” said Mark Wang (no relation Zilin Wang), director of capital markets regulation at BCSC. “So if you are regulated in the U.S. or by another Canadian province, we would exempt from recognition – although we would still impose a number of requirements around our ability to obtain information and regular reporting.”
The BCSC adds that there has been at least one case of a new company receiving new recognition as an exchange operating in B.C. in the last five years, while several others obtained exemptions during that time.
“Getting an exchange up and running is a significant undertaking, so we need to reaffirm the need to reach out to us and talk to us if you want to operate an exchange,” BCSC’s Wang said, adding that the process involves a $750 fee and usually takes months, not weeks. “It’s a step that you need to take.”
The BCSC website lists all the recognized exchanges in B.C., he added.
The VSEC site, almost completely in Chinese, appears to target investors specifically in that market. The website lacks an English component, and the companies receiving listings (as listed on the site) are given a “listing certificate” along with a number. All the companies are Chinese, and none appear to be listed in any major North American stock market (Nasdaq, TSX) under their Chinese names.
The site also includes “crowdfunding,” “acquisition” and “investment” sections, often displaying the companies receiving listings from VSEC as opportunities for investors to get involved.
Chinese-language newspaper Sing Tao Daily reports that it found no VSEC offices in Shenzhen as listed by the company on its website. VSEC disputes those claims. •
