About the Toronto Stock Exchange

The Toronto Stock Exchange is Canada's largest exchange. It is part of TSX group, which also operates the TSX Venture exchange, primarily for smaller, start up companies, Natural Gas Exchange, Shorcan Brokers limited for fixed income, and as of April, 2008 merged with Montreal Exchange to form TMX group. The Toronto Stock exchange is the third largest exchange in the North American continent with NYSE and NASDAQ larger if you judge by market cap. The Toronto Stock Exchange is located in Toronto as the name implies.

  1. History

    • Although there are no records, the Toronto Stock Exchange idea may have come from a small group of businessmen that formed the Association of Brokers. Later, a group of 24 men created the Toronto Stock Exchange on the evening of October 25, 1861 and this time had records and the gave the exchange its name. They met in a Masonic Hall in Toronto. Later, in 1878 the Legislative Assembly passed an act that allowed the incorporation of the exchange. In 1934, they merged with the Standard Stock and Mining Exchange, their biggest competitor. In 1997, they changed their approach and went the route of NASDAQ by closing their trading floor. The Toronto Stock Exchange then used only a quoting system instead of the traders on the floor for all transactions.

    Size

    • The Toronto Stock Exchange is the third largest exchange in the North American continent with NYSE and NASDAQ larger if you judge by market cap. Since it closed it's trading floor in 1997, it is now the second largest North American stock exchange to use the electronic quoting system, with NASDAQ as the first.

    Function

    • The function of the Toronto Stock Exchange is to provide a market where senior equities sell. There are about 1500 issuers on TSX and the market offers an easy opportunity for those wishing to buy stock and sell it. TSX sells older, more established companies and larger ones. It's sister market, TSX Venture offers a regulated market for smaller companies and one where companies that require venture capital are often sold.

    Features

    • A new feature of the Toronto Stock Exchange is the Special Purpose Acquisition Corporation or SPAC program. This program allows the public the opportunity to invest in various companies and sectors of industry that normally only the private equity firms had the resources to invest. If the individual doesn't meet the requirements to purchase a hedge or private equity fund, the SPAC will give them the opportunity to do so. The SPAC program has the company start out as a shell until it raises $30 million CND. Within 36 months, it must have a targeted acquisition of an operating company within 36 months of listing on the exchange.

    Benefits

    • TSX has the most oil and gas stocks of any exchange in the world. It opened it's new trading platform in December of 2007 making it a totally automated exchange. The Toronto Exchange also offers "Multiple Give-Up" which allows investors to name their own dealers, but use the most efficient and cost effective method of clearing the stock. This makes it easier for those Americans purchasing Canadian stock and make cross border trading easier.

    Considerations

    • The Toronto Stock Exchange demutualized and became a for profit organization in 2000. It acquired the Canadian Venture Exchange in 2001 and renamed it TSX Venture. The company trades as TMX and trades under the symbol X. The stock provides a very good dividend, approximately 1.52 per share. If the price per share is $24, the dividend equals about 6 percent per year. Of course, the dividend and price fluctuates so if you're looking for income from dividends, always check the latest information.