Salman Partners, a Vancouver investment broker that specialized in the resource sector, is closing its doors.
The independent investment broker, which has raised $20 billion over the last two decades—much of it for publicly traded resource companies—has announced it will resign from the Investment Industry Regulatory Organization Of Canada (IIROC) and start winding down its operations as an investment broker in February.
“Industry conditions have made it extremely difficult for independent dealers to remain profitable,” the company said in a December 16 press release.
“In this environment, Salman Partners has made the decision to voluntarily resign from IIROC. Arrangements have been made to ensure an orderly transition of all client accounts to alternative registered dealers and clients will be receiving information on those transfers shortly.”
Salman Partners has been involved in investment, market analysis and investment banking since 1994.
The resource sector, particularly mining and exploration, has been in crisis since about 2011. Investors have lost faith in resource sector companies, with the junior mining and exploration sector particularly hard hit.
The TSX Venture composite index – heavily weighted with junior exploration companies – was down 27% in 2015, and is down 76% since 2011. A total of 187 junior mining and exploration companies have been delisted from the TSX Venture exchange since 2011. Half of those were in the last two years – 55 in 2014 and 43 in 2015, as of October.
While low commodity prices are one of the reasons for the resource sector crisis, some retail investors have also blamed securities regulators and the Toronto Stock Exchange for hamstringing the junior resource sector with costly and overly bureaucratic listing requirements.
Earlier this month, the Venture Capital Markets Association, which represents a small group of local retail investors, blamed regulators like IIROC, the Capital Markets Regulatory Authority and BC Securities Commission for killing jobs in Vancouver’s junior mining sector.
