Transaction Costs Lowest On The Toronto Stock Exchange

According to a pair of recent studies, transaction costs for institutional trades are lower on the Toronto Stock Exchange than on competing US exchanges. One study, conducted by New-York based trading consultant Elkins/McSherry Company, found that the market impact costs on cross-listed trades were lower in Canada than in the U.S. by roughly 4 cents per share, despite the fact that average trade sizes were much larger. Market impact costs provide a measure of the change in the price of a stock from a point just prior to an order being placed to just after the trade. Elkins/McSherry concluded that the better performance in Canadian markets is directly linked to superior liquidity and trading efficiency. A second study by Passport Financial Services examined trade-to-trade data for all trades conducted on the TSE and the US exchanges in 1997 and 1998. The Passport study shows a clear advantage for the Toronto market over the NYSE, Nasdaq and AMEX for block trading in large-cap stocks. "We are encouraged by these studies," said Barbara Stymiest, TSE President and CEO. "But the TSE cannot be content. We must continue to push forward and do more to preserve and strengthen our position as a stock market leader in an increasingly competitive global environment." The fully automated Toronto Stock Exchange consistently ranks among the world's top exchanges by market capitalization and trading volume. In 1999, the average daily value of TSE trading exceeded $2 billion. The TSE provides investors with a well-regulated, fair and accessible marketplace.