Exchanges Amend Agreement To Realign Markets; Montreal Exchange To Provide Small Cap Market In Quebec

The Alberta Stock Exchange (ASE), the Montreal Exchange (ME), The Toronto Stock Exchange (TSE) and the Vancouver Stock Exchange (VSE) announced today that they have revised their agreement to realign their markets in order to address concerns expressed in Quebec about the need to maintain a market for small capitalization companies in Montreal. The exchanges are confident the changes to the original March 15, 1999 agreement respond to those concerns, while preserving the economic efficiencies and related benefits of market specialization for investors, listed companies and securities firms. As originally agreed, 3 specialized exchanges will be created. The TSE will list and trade senior equities, the ASE and VSE will merge to form a pan-Canadian market for junior equities, and the ME will focus on derivatives. Under the revised agreement, the ME will also maintain a market to serve junior companies in Quebec. The ME will provide listing and regulatory services for small cap Quebec-based companies. Pricing and trading information for the ME's small cap companies will be published separately. The ME will adopt trading rules identical to those of the new Canadian Venture Exchange (CDNX), and the ME will contract for trading services with CDNX, which will provide the electronic trading platform for the ME's stock list. The ME's small cap market will be overseen exclusively by the Commission des valeurs mobilières du Québec (CVMQ). As contemplated by the original agreement, interlisting among the exchanges will be eliminated, and companies listed solely on the ME that qualify to trade on the TSE are being offered a TSE listing without any initial fees. Following implementation of the realignment, companies that meet the TSE's listing requirements will not be eligible to trade on the ME's small cap market. The TSE will provide listing services to Quebec-based issuers and securities firms from its Montreal office. The TSE has applied to the CVMQ for recognition as a stock exchange providing services in Quebec. The revised agreement will continue to centralize liquidity in one market for each security, streamline rules and regulatory processes, and provide access to all the markets for the members of each of the exchanges. The exchanges are making significant progress towards implementation of the market realignment. The merger of the ASE and VSE to form CDNX is scheduled to occur on November 29th, 1999. The ME plans to establish its small cap market using CDNX's trading platform by the end of this month. The TSE has already invited ME-listed companies which likely qualify to apply for TSE listing, and trading in these issues is planned to move to Toronto in early December.