DEFINITION of 'Toronto Stock Exchange - TSX'
The Toronto Stock Exchange (TSX) is the largest stock exchange in Canada. It was established in 1852 and formally incorporated in 1878. The exchange is headquartered on Bay Street in Toronto; it is owned and operated by the TMX Group. TMX is owned by Maple Group Acquisition Corporation.
BREAKING DOWN 'Toronto Stock Exchange - TSX'
The Toronto Stock Exchange was known as the TSE until 2001, but is now referred to as the TSX; there was no change to the full name. The TMX Group was formally the TSX Group. Canadian exchanges have traditionally been home to a large number of natural resource and finance companies.
The TSX is the third-largest stock exchange in North America by capitalization, after the New York Stock Exchange (NYSE) and the Nasdaq. It's the largest exchange in the world by number of listed securities. TSX merged with the Montreal Stock Exchange (Bourse de Montreal) in 2009. Parent company TSX Group became TMX Group to reflect its ownership of both exchanges.
Electronic Trading of Many Instruments
Trades on the TSX are done entirely electronically, as the exchange eliminated its trading floor in 1997. This is analogous to the Nasdaq in the United States. Among traded instruments are shares in companies, investment trusts and exchange-traded funds. Other financial instruments such as bonds, commodities, futures, options and other derivative products are also actively traded. All transactions are denominated in the Canadian dollar.
Over 1,500 companies are listed on the TSX. Among the largest are Suncor Energy (Canada's largest energy company), the Royal Bank of Canada (the largest bank in Canada and the 12th largest in the world) and the Canadian National Railway. More than 2,000 additional smaller companies are listed on the TSX Venture Exchange, known as the TSX-V.
The S and P/TSX Composite Index tracks the value of the 60 largest stocks on the TSX. Trading in these companies accounts for 70% of the total volume on the exchange.
A proposal to merge the TSX and the London Stock Exchange (LSE) in 2011 failed to receive the required two-thirds majority of votes from shareholders. Parent company TMX had proposed the merger to avoid being taken over by Maple Group Acquisition Corporation, a consortium of Canadian investors including the Canadian Plan Investment Board, Scotia Capital and TD Securities Inc. After the LSE merger plan failed, TMX agreed to the Maple Group takeover. TMX also owns Canada's largest clearinghouse for securities transactions, CDS, which handles 90% of Canadian trading.