What is Toronto Stock Exchange (TSX)
Established in 1852 and owned and operated as a subsidiary of the TMX Group, the Toronto Stock Exchange (TSX) is the most significant stock exchange in Canada. Until 2001, the Toronto Stock Exchange was known as the TSE.
BREAKING DOWN Toronto Stock Exchange (TSX)
Canadian exchanges have traditionally been home to the securities of many 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 the number of listed securities. In 2009, TSX merged with the Montreal Stock Exchange (Bourse de Montreal). To reflect ownership of both exchanges, the parent company, TSX Group, became TMX Group.
Electronic Trading of Many Instruments
With the elimination of the trading floor in 1997, trades on the TSX are electronic, analogous to the Nasdaq in the United States. Traded instruments include 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. The Canadian dollar is designated for all transactions 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 &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.
In 2011, a proposal to merge the TSX and the London Stock Exchange (LSE) failed to receive the required two-thirds majority of votes from shareholders. TMX proposed the merger to avoid a takeover 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 Canadian Depository for Securities (CDS), Canada's most significant clearinghouse for securities transactions, which handles 90% of Canadian trading.