The Toronto Stock Exchange (abbreviated to TSX) is the leading stock exchange in Canada. Its focus is on trading senior equities (stocks) although more exotic investments are traded. As well as being Canada's largest stock exchange it is also North America's third largest and the world's eighth biggest by market capitalization.
Toronto is where many of Canada's biggest companies go to raise funds, although some of the largest companies can go to exchanges in the United States, particularly the New York Stock Exchange.
At the end of 2007, the stock exchange listed 3,951 companies with $2.2 trillion market capitalization. All five of Canada big five banks are listed on the Toronto Stock Exchange.
Due to the nature of the Canadian economy the Toronto Stock Exchange has a heavy bias towards resource stocks. As well as stocks there are a number of other investments such as split-share corporations, investment funds, income trusts and exchange traded funds (ETFs).
A large proportion of the American and European firms listed on the Toronto Stock exchange are listed there because they are active in the mining and exploration sector. More firms in the mining, gas and oil sectors are linked in Toronto than are on any other exchange with 434 firms quoted on the exchange in 2008.
The Toronto Stock Exchange has been a for-profit company since 1991. It is currently operated and owned by the TMX Group Inc. TSX is one of the world’s largest stock exchanges to be totally automatic with no floor trading.
The Toronto Stock Exchange started in 1852 when a number of businessmen from Toronto formed the Association of Brokers. On 1861 the Toronto Stock Exchange was formed by twenty four men at the Toronto Masonic Hall. The Toronto Stock Exchange has been continuously operating since this time, apart from a three month break at the beginning of the First World War in 1914. It had to wait until 1878 before the Ontario legislature officially incorporated the exchange.
In 1934 the Standard Stock and Mining Exchange merged into the Toronto Stock Exchange. In 1977 computerized trading was introduced, and this totally replaced the open outcry trading in 1997.
In 1999 a realignment plan was put into effect which specialized each of the leading stock exchanges in Canada, The Toronto Stock Exchange is now the only stock exchange that can trade senior equity (the stocks that own the company and that vote for the board of directors). Derivatives are traded at the Montreal Exchange and more speculative shares are traded on the Canadian Venture Exchange.
The TSX Venture Exchange
As part of the reorganisation of Canadian stock exchanges a number of more speculative funds were moved to a new exchange. The Canadian Venture Exchange (CDNX) was set up as a stock exchange in 1999 based in Calgary, Alberta. It is a merger of a number of smaller Canadian stock exchanges, including those of Alberta, Winnipeg and Vancouver. It also incorporates the equity trading side of the Montreal Exchange and the Canadian Dealing Network. In 2001 it was acquired by the Toronto Stock Exchange and renamed the TSX Venture Exchange.
The TSX Venture Exchange is a marketplace for venture capital to support emerging companies who have not met the listing requirements of the Toronto Stock Exchange.