Introduction CNSX is a stock exchange alternative to traditional stock exchanges where high costs and large capitalization requirements are often barriers to trading in a company's securities. Responding to the consolidation of stock exchanges in Canada, CNSX's founders identified the need for a low cost, streamlined stock exchange – with an extremely high standard of disclosure. CNSX's unique market model matches enhanced disclosure and streamlined issuer regulation with leading edge technology to meet the needs and characteristics of public companies, their investors and investment dealers. This model, combined with comprehensive regulatory oversight, provides an efficient new marketplace that fosters integrity, transparency and liquidity for trading securities.

BENEFITS OF CNSX:

• A stock exchange that features a cost effective alternative marketplace for issuers


• A visible market for qualifying OTC companies


• A market model that attracts dealer participation

INTEGRITY

• CNSX is recognized by the Ontario Securities Commission (OSC) as a stock exchange and is subject to OSC regulatory requirements


• Investment Industry Regulatory Organization of Canada ("IIROC") will provide market surveillance and regulatory oversight


• Issuers must remain in good standing with their securities regulator and comply with CNSX's Policies


• Dealers must be IIROC members and adhere to Universal Market Integrity Rules and CNSX's trading and sales practice rules

TRANSPARENCY

• CNSX Trading system displays an open book with client and dealer orders exposed


• Quotes, market data and current trading information are available at CNSX.CA


• TSX Datalinx distributes real-time CNSX stock exchange market data


• Enhanced disclosure by CNSX Issuers is available to investors on CNSX.CA

LIQUIDITY

• A fully automated marketplace that provides immediate execution of trades


• Central Limit Order Book - focuses available liquidity, provides price discovery


• Competitive market making model that provides additional liquidity

VISIBILITY on CNSX.CA

• Provides a centralized resource for dynamic information about CNSX issuers/dealers, CNSX market data and CNSX.


• Issuer Disclosure Hall provides widespread visibility for issuers and easy access to information for investors


• CNSX issuers can quickly, securely and cost-effectively provide investors with all required disclosure documentation about their company and securities in the Disclosure Hall, which offers enhanced visibility through a single source


• Issuer quotes and current and historical trading activity is widely accessible


• Market depth (market displayed by order, market displayed by price), largest increases/decreases, top ten issues, market summaries of daily, monthly, and annual CNSX trading activity and CNSX notices

CNSX TRADING SYSTEM

• Offers dealers access to order display including price, volume, recent trade history and other market information


• Traders enter orders through their order entry vendor system


• Orders queued in marketplace according to pure price and time priority rules


• Trade on all business days between 9:30 am and 4:00 pm EST


• CDS provides clearing and settlement through Continuous Net Settlement System

ISSUERS

• A cost effective alternative marketplace - pay only an application fee and monthly fee


• Issuers benefit from streamlined regulation - no transactional reviews/approvals/fees


• Issuer standards for quotation acceptance and enhanced disclosure requirements


• Post disclosure documents on CNSX.CA


• Reporting Issuers in Canada in good standing

DEALERS

• IIROC members, registered in Ontario


• Agreement to comply with UMIR and CNSX trading rules


• Pay an application fee, monthly access fee and fees for each trade


• Market Makers maintain a continuous two-sided quote with a reasonable spread for a minimum of 90 consecutive days