Of the 239 eligible votes, 214 were cast. This strong voter response is a clear indication of how seriously the membership of WCE views the issue of demutualization and its importance to the future of WCE.
The vote effectively clears the way for the transformation of the Exchange from a membership-owned, not-for-profit organization, to a for-profit, federal corporation.
WCE demutualization is contingent upon regulatory approvals from the Manitoba Securities Commission and provincial legislative amendments, which are anticipated to be completed in the next 4 to 6 months.
WCE President and CEO, Bennett J. Corn said, "The new global environment is demanding that exchanges have a dynamic and integrated business ownership and management structure. This change will allow us to be highly responsive to customers and the market in which we operate. Demutualization will allow WCE to make strategic decisions more quickly and give us the flexibility to diversify."
A for-profit corporation has the benefits of a streamlined governance and managerial structure. This provides improved financial decision-making and the flexibility to pursue new business opportunities.
Trading rights in WCE products will not require shareholder status, but will be based on a separate contractual relationship between the trading participant and the Exchange.
WCE is the third exchange in Canada to undertake demutualization, following both the Toronto Stock Exchange and Bourse de Montréal. It also follows many other major international exchanges which have demutualized.
Industry trends are dictating the necessity for these reorganizations. These trends include the increased use of technology, the proliferation of strategic alliances and mergers, consolidation and centralization, the advent of new participants, and customer demand for direct access, increased services and transparency.
The Exchange currently has a membership of 240, which annually accounts for the generation of derivative trades on the exchange based on underlying agricultural commodities valued at about $13 billion.
WCE trades futures contracts in: canola, western barley, flaxseed, oats, feed wheat and field peas; and options contracts in: canola, flaxseed, feed wheat and western barley. Established in 1887, Winnipeg Commodity Exchange is an organization providing financial instruments for price discovery and the transference of risk in an efficient and open manner.
