IWD 2023 Special: Women in Capital Markets | The CSE Podcast Ep9-S3

It's International Women's Day! Join the Canadian Securities Exchange's Anna Serin as she's joined by CSE CFO Mary Anne Palangio and CSE CLO Tracey Stern for a special edition of the Exchange for Entrepreneurs Podcast. In this episode, Mary Anne and Tracey share perspectives earned through their unique journeys in the Canadian Capital Markets, including the specific challenges and opportunities they see for women building their careers in the legal, finance, and accounting sectors.

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Host: Anna Serin
Producer: James Black
Guests: Tracey Stern and Mary Anne Palangio

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Transcript

Anna Serin (00:00):

Hi, my name's Anna Serin and I'm Director of Listings Development with the Canadian Securities Exchange. You're joining us for a special edition of our Exchange for the Entrepreneur podcast. We are here celebrating International Women's Day on Wednesday, March 8th. I am joined by two amazing guests. I'm very excited about our conversation today. They're women that I work for, that I work with at the Exchange. I'm very excited to be joined by Mary Anne Palangio, the CSE's Chief Financial Officer. Hello, Mary Anne.

Mary Anne Palangio (00:31):

Hi, Anna.

Anna Serin (00:32):

And I'm also joined by Tracey Stern, the CSE's Chief Legal Officer with the CSE. Hello Tracey.

Tracey Stern (00:39):

Hello, Anna.

Anna Serin (00:41):

Firstly, I'm very excited about this interview, because I enjoy working with the two of you so much and the three of us have fantastic conversations as it is. So very excited to show the world our amazing exchange and the amazing women that are leading it. I wanted to talk a little bit about women and stock exchanges. So there's lots of information that we're seeing about women coming into capital markets and we've seen an incredible growth over the past few decades. It's pretty exciting to see. I'd say most rooms I'm in now have a very nice diverse mix. But women in stock exchanges is a bit of a different topic.

(01:17):

I thought this was interesting. In North America, this is isn't in Europe, but in North America, the first stock exchange really commenced because of the railroad. So people wanted to have the ability to cut across homeowner's lands. What they did in turn to be able to cut across their lands with the railroad track, was they gave the land owners share in the railroad. This then became the first real game in the stock market in North America. Women at the time were not really allowed to invest or invest in their name. So in 1880, a woman by the name of Cady Stanton started her own female run stock exchange. I think by the time she was said and done, there was a few that were built, which is pretty exciting. So it was all about investing in the railroad. We have some amazing pioneers. I think there's been some incredible women globally that have been part of stock exchanges and helped their build.

(02:14):

The one thing that I have to say about the CSE that does make us truly unique, is we are almost 20 years old. We're a very young exchange and we've grown very quickly. So it's amazing to have these incredible women at the helm of our exchange. Of course, alongside our wonderful CEO, Richard Carlton. I just wanted to start talking a little bit about what their roles are, just for those that may not know what a CFO for a stock exchange does. Mary Anne, her role includes managing and directing the accounting and financial reporting for the company. Very important considering we expect that of all of our issuers. She works closely along our CEO and senior management team on corporate strategy and business development. She was a director for the CSE in 2016 and sadly had to retire from that role to join us internally as CFO, which we're very happy about. During that period, she served as chair of the audit committee and as Chair of Human Resources Committee. Mary Anne, it's been such a breath of fresh air to have you with us at the CSE. How long has it been now?

Mary Anne Palangio (03:19):

Just coming up on three years.

Anna Serin (03:20):

Wow. See, it doesn't feel that long because of the pandemic. It feels like it's been short, but I feel like I've worked with you forever and it's just been such a pleasure. Why don't we start with you? Tell us about your roadmap into the capital markets.

Mary Anne Palangio (03:34):

I guess it's less that I necessarily chose capital markets. I think it's more capital markets chose me. In my first job out of university, I worked for a public accounting firm, and just over the time I was there, it evolved that most of my clients and audits that I worked on were in capital markets, various different industries, parts of capital markets. At the end of the day, I ended up joining one of those clients that was a pension plan. And again, all of my roles since then have been in capital markets. But the nice thing about it is, you can have really diverse roles and really diverse companies because capital markets is such a broad set of companies. But that's sort of the journey here. And to your point, was on the board of the CSE and I'm delighted to now be here working alongside the likes of you guys and Richard as well.

Anna Serin (04:26):

Wonderful. Okay. I'm going to jump over to you, Tracey. So Tracey has just joined us this past year. Or sorry, was it in 2023 that you officially? 2022?

Tracey Stern (04:37):

2022.

Anna Serin (04:37):

It's been recent.

Tracey Stern (04:39):

Just in January. It feels like forever, but just in January.

Anna Serin (04:42):

It does. It does. You're part of the family. So the Chief Legal Officer is a fairly important role with the stock exchange. Almost as important, if not as important as the CFO and our CEO. The three of you really are kind of the tripod of the exchange. The Chief Legal Officer, you're responsible for all the risk, legal and compliance matters relating to the CSE. That's a big job, Tracey, and you are definitely qualified for it. You joined us after more than two decades with the OSC, which is one of our regulators. So this has been a very natural and wonderful fit. Why don't you tell us a little bit about your journey and how you ended up in the capital markets?

Tracey Stern (05:26):

I think much like Mary Anne, I fell into it. I articled at a firm in downtown Toronto, loved my securities and corporate rotation and wanted to do more of that. When I left the firm, I joined the OSC. Back at the time, the OSC was divided into different departments and the department that I was in, we did everything. So even though there were multitudes of people there still, we were doing all kinds of cross sections of different things in the context of regulation. Then when the market regulation department was formed, I joined it in, I think it was about 1999 or 2000, and that's where I stayed and loved every second of being in market regulation. That branch was responsible for everything from Y2K to high frequency trading to now crypto trading platforms and marketplaces. So it was a vast and interesting 20 plus year career at the OSC really getting into the front lines of regulating change.

Anna Serin (06:37):

Okay. Tracey, so you had mentioned in our pre-chat that there was actually a large community of women that were at the OSC. Is that correct?

Tracey Stern (06:45):

Yes, that's correct. So in the early days of the OSC, it wasn't very big, maybe 150 people, a lot of women. I think that was driven largely because it was a government organization at that time, no longer in terms of it's now self funded. It was a job that could be managed in terms of nine to five or eight to four, and they had really good benefits on maternity leave. So I think at the time that I joined, it was probably about 70/30 for women in terms of women in the roles and in the leadership roles. Then over time, it's evened out so that when I left, it was probably about 50/50, but they were very progressive in the context of the mat leave and the paternity leave at the time and still because of the connection to government. So it was a unique opportunity for me to work with a myriad of women leaders, a lot of whom I've taken bits and pieces of lessons over the years to help me along in my journey.

Anna Serin (07:57):

You know what? You touched on something that's incredibly important I think in this discussion is the idea when you are working for an organization that has those benefits for maternity and paternity, which has become I think almost as equally as important. All three of us have children. All three of us have built a fairly long career in the capital markets and have had to, whether short or long, had to take a moment away from it to tend to our children. I think from a society standpoint, we recognize how important it is for either the mother or father to have some real time with their children when they're born. It builds out a market. It builds out us as a society. So I think that's been a really important thing. It's been something that's been important in Canada. I think especially over some other countries, we've been fairly progressive and I think it's been something that's been very helpful to launch women into any industry.

(08:54):

Tracey, one thing I wanted to ask you before we move on because we're going to get into some fun stuff here. I wondered if you would give our viewers, I think people know what the regulators are in the Canadian markets, but would you give us a little overview? What are the regulator's job? What is their role, and what drives them as far as compliance and safety and watching out for investors? What is OSC there for?

Tracey Stern (09:22):

The OSC is one of 13 securities regulators across the country. It's a provincial system and they work with also the self-regulatory organizations I guess have now merged. So it's called New SRO, formerly the MFDA and IIROC. But really all of those organizations are driven by the same mandate, which is fostering fair and efficient markets and confidence in markets, investor protection and ensuring that investors have the information that they need to make informed decisions, that they're protected. There's also some movement now towards systemic risk and the maintenance and management of systemic risk. So all of the regulators really focus their attention and all of their rules on those aspects of the mandate that they're given.

Anna Serin (10:19):

A super important element to our markets and to maintain that integrity. Right?

Tracey Stern (10:24):

Absolutely. I think that part of the fair and efficient capital markets piece of the mandate is all about market integrity and making sure that stock exchanges like ours operate with integrity, that we're focused on the public interest, that we protect investors, that we foster capital formation. I think that the regulators help to guide stock exchanges, dealers, investors in that direction.

Anna Serin (10:56):

So on that note, Mary Anne, I'm going to move over to you because I want to talk about your job a little bit because I think this is really important for people to understand as well from the investor side or from the issuer side. Financial reporting is kind of one of the crux of how we function as a public market. The disclosure requirements around financial reporting, the auditing requirements, how things are done, it builds on that structural integrity in the markets, wouldn't you say?

Mary Anne Palangio (11:24):

Absolutely. And fitting into what Tracey just talked about in terms of the regulators and having oversight and guidance for us around trust in the public markets, basically that ongoing continuous disclosure by the issuers is critical in terms of providing investors, either existing investors or potential investors, with the right information at the right time for them to make informed decisions. And then we here in our own finance department practice what we preach in terms of doing monthly financial statements for our shareholders as well, despite the fact that we're a private company.

Anna Serin (11:59):

That's right. And I get those because I'm a shareholder of the CSE, a proud one at that. Okay, Mary Anne, I'm going to start off with you. And look, these are tough questions. I'm going to walk away from the women bent, but let's talk about people in the capital markets a little bit. There are some things that are unique to women as far as challenges and opportunities. We're going to touch on those, but feel free to talk about any challenges that humans in the capital markets might see. In your time in the capital markets, what are some challenges that you have seen as far as people out there trying to build their careers?

Mary Anne Palangio (12:36):

I think it touches very much on what we talked about earlier, particularly for women who have children and the expectation around hours, deadlines, unreasonable deadlines, all of that piles up. I think for women and for any leader, it's really about looking at how do leaders direct that and deal with that? And taking note of what looks like good leadership and what doesn't. And just as importantly, what doesn't, to learn from that. I think over the years people have recognized that we need more diversity, we need more balance. So there's much more ability to find roles in capital markets that allow you to have that. I think it's great.

(13:25):

Tracey was talking about the OSC who was obviously way ahead of the game on that front, and now I think the rest of capital markets is starting to catch up and that provides a lot of opportunities. Again, as I mentioned earlier, capital markets is so broad. You can have a role in finance, you can have a role in legal, you can have a role in sales and marketing, you can have a role in IT. I spent several years running an IT department, which I learned a ton at, but otherwise never would've had that opportunity. Again, capital markets, great opportunities and great challenges to learn new stuff.

Anna Serin (14:02):

Absolutely. Tracey, what are your thoughts? I mean we touched on the maternity and those benefits, but what are other challenges that potentially women have faced as they've built out their careers?

Tracey Stern (14:11):

I mean, I think to Mary Anne's point, the expectations around social gatherings and having to stay at work late and going out for drinks and golf games and things like that have been a challenge for women in terms of having to be home at a certain time or don't play golf like me. I don't play golf, but that doesn't mean I can't learn. But I think that nowadays the opportunities are really there for anybody who works hard enough to join the capital markets. I think it's important for those of us that hire people into the capital markets to be open-minded about background, to be open-minded about degrees. Not everyone has to have a business degree to be a bright, creative, innovative thinker. I think that's really important is to make sure that you have at the table with you people who come from different places, who have different experiences, who can bring a different lens to the same old, same old problems and help you be creative in solving them and managing them.

Anna Serin (15:15):

Well. And to that point, Tracey, I myself don't have a degree. The CSE has definitely allowed me to foster my career. I've now been with the CSE almost seven years. I was a broker for about 10 years before that and I have two children. So I've had to do the maternity, I didn't have the degree and it's opportunities like the CSE that really gave me a platform for me to build my career out. Really, I think the one thing that's resonating in everything that both of you are saying is leadership is a really key part of breaking down any walls or barriers to entry for diversity, wouldn't you say?

Tracey Stern (15:52):

Yeah, I completely agree. I think you really need to look for people who are like you and recognize and champion different perspectives and different people sitting at the table. I think it's so critical for communication, for collaboration. Everybody brings their own ideas in a different lens, like I said, to the table and the output of those kinds of discussions are always better.

Anna Serin (16:22):

Absolutely. Okay, Mary Anne, back to you. Look, we've had a few interesting years in the market, so let's just recap what we've all experienced. We all survived the hangover of 2008. Actually, funny enough, in June of 2008, I went on my first maternity leave. So I was not present for the whole meltdown, which a child with colic seems like maybe that was easier than the meltdown. We've kind of come through that. In 2012, the markets really, especially in the junior space, we really suffered. It was a really hard go for a lot of issuers, for a lot of investors, and we really started to see some momentum gain. The CSE itself saw some huge momentum that really kind of launched in about 2016 when we started to see our first cannabis company start to market. And it was a bit of a rocket ship from there. Again, based on the leadership of our senior management team that made some really incredible decisions and allowed us to be a platform for some incredible companies.

(17:25):

We then move into, I think it was 2020 now. My brain of the pandemic has been shut down, but I think it was 2020 that we all shut down. I think all of us wondered as the exchange, what's going to happen to the capital markets as we all are locked in our homes? We can't be out there. We didn't have that physical element anymore, and the markets went nuts. I mean it was unbelievable. I think Robinhood down in the US first three months of the pandemic opened over 3 million accounts just in accounts. That's not the capital loan that funneled into it. And there was a huge desire for the small cap space, which was incredible.

(18:06):

Now we've kind of come out of things. We have some inflation issues. We have some debt issues. We're dealing with some pandemic issues, and the markets have suffered a bit. On the exchange, on that note, though we've seen still some continued huge growth, we're seeing the mining space come back. We're seeing some new sectors. There's always some new sectors that are coming to market. Plant-based protein. There's some new technology coming around. So that's my 30 second, here's what happened since 2008. So Mary Anne, what do you think? Based on all of that, what is the next opportunity in the capital markets? If you were a young person, what would you think is the open place for a market? Where would you head to?

Mary Anne Palangio (18:51):

I think I'll get at my magic eight ball pretty much. But it's interesting because my daughter's 18 and so right at that stage looking to put money in for the future. And I think the world is definitely their oyster. As you say, with the pandemic, people were at home and it was the rise of retail. It was the rise of retail. Investors spending more time, doing some research, doing some investment decisions. I think as we look to the future, I think there's great opportunity. As you say, we're seeing a lot of mining coming back, which is great to see. Really in support of continuing with the electric vehicles and the battery powered everything. I think we'll hopefully see more and more of that kind of green technology companies coming along too as there's more and more focus on ESG generally and how financial statements are going to disclose that in a way that's meaningful for the investors to digest and read and that it's comparable across all of the various kinds of disclosures.

(19:56):

So it's going to be interesting to see how retail investors in particular react to some of those new disclosures and some of the new companies coming up looking specifically more at green.

Anna Serin (20:07):

We're also going to see more regulation, I think, come down with cryptocurrency. Things are changing, how the markets work themselves are changing. I know the CSE is even working on its own securitized token project, so we're seeing lots of development in the tech space. So I think that'll create a lot of new opportunity, wouldn't you say?

Mary Anne Palangio (20:27):

Absolutely.

Anna Serin (20:28):

Okay. Tracey, what about you? What do you think is next?

Tracey Stern (20:32):

Well, I mean I do think that not so much the crypto space, but the blockchain space, I think people figuring out how to harness that technology. Crypto may be here, may not be here, but I think the technology underlying crypto and digital assets will be here. So how do you harness that? How do you address the risks that are involved in using it? It addresses so many issues, but it creates others. So how do you manage those risks in a way that the regulators would be comfortable with? How do you have people and companies be comfortable with using it or be a first mover in using it? I think that's what's coming in terms of more thinking about blockchain and the regulators dealing with crypto and to see who's going to survive, who really built their business in a way that was responsive to the management of risks for investors. I think it's still to be determined who's going to be left once the regulators, especially the ones in the US, have taken all their enforcement actions.

Anna Serin (21:51):

I mean, again, there's so much that's changing so quickly and our markets are changing so quickly. Every time I go out to a conference or a seminar or session, I find younger and younger people in the room, which really excites me to see that next generation funnel in. And they're serious kids. I mean, I shouldn't even call them kids, but they're serious. They're taking it seriously. They're working hard. They get up early, they go to bed late and it's really neat to see that coming into the market.

(22:20):

One thing I wanted to finish off with and share with me whatever you're comfortable with, but I think you know what I love about the CSE and having the two of you helping Richard steer the ship, so to speak, is that you're two incredible human beings to work with and to help run our exchange whether you're female or not. I especially love it that you're female. But do you think there's anything unique? And maybe Mary Anne, I'll start out with you. Is there something unique, do you think? Because I think the CSE is a very unique family of people, some have been with us since day one, some are joining us now, but there's been a lot of cohesiveness in all of our departments. Would you say there's something unique about us?

Mary Anne Palangio (23:06):

Absolutely. There's a reason why I chose to leave the board to come here. I had a bit of a nice view lens into the CSE and the culture here. And to your point, you said family, and it really is. We work well together. We're all passionate about doing the right things for the right reasons and working together to advance the cause. I think that is unique. I know it sounds a bit cliche, but it's actually real here. We're not just saying it.

Anna Serin (23:39):

It is unique. In fact, it's so unique that Tracey's main concern about PDAC next week is when the three of us get to hang out.

Mary Anne Palangio (23:47):

That's right.

Anna Serin (23:49):

Okay. Tracey, what do you think? You're fairly new with us at the CSE. What do you see as unique about us?

Tracey Stern (23:53):

Well, I'm new to being on this side of the CSE, but not new to being on the other side and really making the CSE do a whole bunch of stuff under the regulatory framework. But I mean, I think here, you see the family, you see the connection that people have. You see the desire and the passion that Mary Anne spoke about. You've got a lot of long-term employees and that's not because they just don't feel like going somewhere else. It's because they love what they're doing. They love the CSE. The people who work here have been on a long journey from really a startup to growing and being much more of a player in the market. I think that keeps people here because the story's not over. The story is not finished. So I think people want to see how far they can take the CSE and ride out its success.

(24:50):

I've been here two months, I think, and I feel like I've been here forever. I don't say that in a bad way. I say that in the best way possible because at my age and stage, it's all about the people we work with, the respect, the kindness, the communication, the collaboration, and that's all here.

Anna Serin (25:11):

Absolutely. You know what? I love what you said that our story isn't over yet. There's great stories. I mean, Richard, he's been our CEO for quite some time now. They used to ring a bell in the office when we got a new listing, it was so exciting and now we'd be ringing a bell too often. So we don't do that quite anymore. I think also, one thing that makes us incredibly unique from an exchange perspective is how much we love our clients and our clients are our issuers. Their success is our success, and we spend a lot of time and focus on fostering those. I've also noticed over the past few years, especially with some of the emerging sectors, is a lot of female boards, a lot of women who are running the helm, there's a lot of female brokers out there who are raising the capital. I think it's quite exciting what we're seeing in the markets and young people coming in as well.

(26:06):

Listen ladies, I think you're both fantastic. Thank you so much for joining me on International Women's Day, and I very much look forward to this not being the end of our story and working with both of you for a very long time.

Mary Anne Palangio (26:19):

Thank you, Anna.

Tracey Stern (26:19):

Thank you so much.