TSX Lowest Exchange In The World For Market Impact Costs - Study Finds All-In Trading Costs In Canada Trails Only Japan

In a recent study of the market impact costs of trading, a key measurement of market quality for investors, Toronto Stock Exchange has moved to top spot, as the most-efficient exchange in the world. According to the survey, done for Institutional Investor magazine, by mid-2004 the average Canadian market impact cost had decreased to a world-leading 5.45 basis points. Market impact is measured in basis points, as the volume weighted price change per trade, as a percentage of the total dollar volume, for a given period.

“Our progress did not come about by accident. Addition of impact-lowering features such as icebergs, anonymity and other features contributed to making our marketplace a world leader. As a result, TSX is an increasingly efficient and cost effective market for our participants and our issuers,” said Richard Nesbitt, CEO of TSX Group.

Canadian market impact costs were the lowest of 44 countries that were surveyed. For comparison, market impact costs on the NYSE totalled 7.71 basis points and, on NASDAQ, 12.98 basis points.

After adding fees and commissions to get total costs, TSX was second only to Japan: in the 12 months up to June 30, 2004, Canadian all-in cost per trade was measured at 25.35 basis points. TSX costs were down nearly five basis points from 2003, and it compared to 25.87 for the New York Stock Exchange and 34.50 for NASDAQ.

Trading liquidity at Canada’s largest marketplace, Toronto Stock Exchange, continues to grow. In 2002, the exchange was ninth in the world by the same survey; in 2003, it was sixth.

According to Mr. Nesbitt, “this acknowledges the quality of people we have recruited in both technology and trading, who have the sophisticated understanding needed to adapt to rapid changes in the market.” He added, “It also represents our continued effort to create new products that will attract growing trading volumes to Toronto, and a focused sales effort in trading, listings and data, all backed by strong marketing of the TSX brand, our strengths in Canada and in key global financial centres, as well as Canada’s strengths as an economy.”

Recognizing the need to continue to continue to provide a market that meets the needs of all participants, TSX Markets, with Market Regulation Services Inc. present the Best Execution Conference on Thursday, February 10, 2005 at the TSX Broadcast and Conference Centre in Toronto. More than just the price of a trade, achieving Best Execution involves expertly navigating compliance issues and regulatory reforms while managing market impact, timing and opportunity costs – all in order to minimize total transaction costs and increase total returns.

This Conference will provide the opportunity to learn from leading international authorities on how to better define and implement Best Execution strategies. For information on registering for the course, click on the following link:

http://www.tsx.com/en/mediaCentre/events/eventItems/8241.htm