Toronto Stock Exchange to become sole senior equities market in Canada

The Board of Governors of the Toronto Stock Exchange (TSE) is pleased to announce that the TSE has reached agreement with the Montreal, Vancouver and Alberta exchanges to restructure the Canadian markets along lines of market specialisation to ensure a strong and robust exchange system which will benefit Canadian capital markets and all participants. The TSE Board of Governors voted earlier today to proceed with the proposed restructuring, subject to the necessary regulatory or other approvals. "The agreement to restructure formalises the natural evolution of our markets, creates a focus on current strengths and ensures that we continue to meet the needs of all market participants in the most cost-effective and efficient manner. This restructuring plan will realise important benefits including stronger markets, significant cost savings and greater efficiency for member firms, issuers and investors," said the Chair of the TSE Board of Governors, Barbara Stymiest. "We believe these changes will help ensure that the Canadian capital market system is streamlined and better able to perform in an increasingly competitive global market place. This development is also completely supportive of the TSE's Blueprint for Success strategy to provide improved levels of service to all our customers - member firms, issuers and investors," said TSE President and CEO, Rowland Fleming. "This initiative reflects the commitment of Exchange management and industry leadership, both of which recognised the perils of inaction and the merits of moving forward," Fleming said. The TSE will be the sole senior equities exchange in Canada. Issuers with current interlistings on the TSE and ME will now only require a TSE listing, thereby saving on dual listing fees, as well as filing requirements relating to both listings. The TSE will provide listing services in Montreal, initially through the facilities of the ME, to ensure continued service to Quebec-based companies listed, or wishing to list, on the TSE. Over time, the TSE will consider a presence in Western Canada to service the needs of its western-based listed companies. Members will also save through minimising duplication of costs and investments in technology among several exchanges, while institutional and retail investors will benefit from improved liquidity created by a stronger, more efficient, streamlined capital market system. Under the proposed restructuring, the TSE will transfer all its derivatives products to the Montreal Exchange. The derivatives trading floor shared by the TSE and the Toronto Futures Exchange was scheduled to close in the middle of next year and convert to a fully electronic derivatives market. The new TSE derivatives trading system - OM Click - will be transferred to the ME for installation in early 2000. The derivatives business of the TSE and the TSE-owned products of the TFE will be migrated to the ME at the time of floor closure. Until then, TSE derivative products will continue to trade on the TFE floor. "Over the past several years, the ME has carved a niche and significant reputation in the derivatives business. The TSE has believed for some time that a strong Canadian derivatives market is a very important element of a strong Canadian capital market. By concentrating liquidity and services, much greater synergies are achieved," said Fleming. To ensure a vibrant national junior market that best serves the needs of small Canadian businesses seeking equity capital, the Canadian Dealing Network (CDN) will be consolidated into a new merged VSE/ASE entity. This new market will maintain a strong presence in Ontario, initially through the current offices of CDN in Toronto, to ensure continued access to capital for emerging companies in this province. A similar commitment has been made to maintaining a junior market in Quebec through a strong presence in Montreal. "In the near term, the needs of small businesses in Ontario will continue to be served through junior market facilities in Toronto. Over time, service and accessibility should be further enhanced as additional new listing offices will be considered for other centres such as Ottawa and London," said Fleming. The fully automated Toronto Stock Exchange consistently ranks as one of the world's top exchanges and is Canada's premier market for senior equities, accounting for approximately 90% of all equity trading in Canada. In 1998, more than 26 billion shares traded, worth more than $490 billion - about $2 billion a day in share transactions. With a proud 147-year history at the heart of the Canadian economy, the TSE continues to provide Canadian and international investors with a well-regulated, fair and accessible marketplace.