March 15, 1999

March 15, 1999 - Canada's four exchanges have reached an agreement to restructure along lines of market specialization, subject to regulatory approval. This initiative is designed to ensure a strong and globally competitive market system that will benefit Canada's capital markets and all participants. The decision to proceed with this restructuring followed extensive consultations with stakeholders and will result in three specialized exchanges, each exclusively offering facilities and services in a single sector of the market.

The restructuring will reduce market fragmentation by simplifying the role of each exchange, as follows:

1. The Toronto Stock Exchange (TSE) will trade all senior Canadian equities. Responsibility for all senior equities currently traded on Montreal will be transferred to the TSE;
2. The Montreal Exchange (ME) will be the exclusive exchange for futures and options in Canada. Responsibility for all options currently listed on the TSE and all TSE futures products currently listed on the Toronto Futures Exchange (TFE) will be transferred to the Montreal Exchange;
3. The Alberta Stock Exchange and Vancouver Stock Exchange will merge to create a single, national junior equities market. This new market will also consolidate the operations of the Canadian Dealing Network (CDN). Responsibility for all junior equities currently listed in Montreal will be transferred to this new junior equities exchange. The Winnipeg Stock Exchange will also be invited to participate in the national junior equities market.

Purpose and Benefits

The restructuring program will be sensitive to regional needs and ensure public access to an equivalent range of facilities and services, in the same places and the same official language currently being provided by the exchanges.

The initiative will also result in significant improvements in the functioning and competitiveness of Canadian financial markets by leveraging the strengths of each exchange. The restructuring program will build market opportunities for member firms to enhance the competitiveness of Canada's capital markets in meeting the needs of issuers and investors.

In particular, the restructuring program will favour the development of a world class futures and options exchange. The program will also contribute significantly to enhanced liquidity on a single, senior equities market. Finally, the restructuring program will confirm Canada's role as a leader in capital formation for junior companies by creating a consolidated national junior market. A broad range of participants in Canadian capital markets will benefit from lower costs and improved liquidity.

Market Access

Companies and market participants throughout Canada will have the same access to equity markets as that which currently exists. In order to facilitate access to equity markets both the TSE and national junior market will operate listing services offices in Montreal in order to provide issuers in Quebec with ease of access to capital markets. A listing services office will be maintained in Toronto for junior issuers in Ontario wishing to list on the junior equities market.

Brokers who are members of one exchange and who meet all normal requirements will have access to the trading facilities of the other exchanges.

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