Markets
to build on strengths through specialization
Canadian Exchanges Announce Major
Restructuring
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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:
- 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;
- 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;
- 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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