Stock Exchanges In Canada

Canada’s Four Stock Exchanges

Similar to many major capital market centres around the world, Canada has multiple stock exchanges to publicly list and facilitate the buying and selling of securities. Multiple marketplaces encourage competition and introduce new solutions and new technologies, which leads to a better experience as a public company – enhanced quality of trading, lower fees and increased liquidity.
 

Two Senior Stock Exchanges

 
There are currently two senior stock exchanges in Canada that are home to public companies and investment products that meet the requirements of a senior listing.
 

Toronto Stock Exchange (TSX)

The Toronto Stock Exchange is owned by the publicly traded, for-profit entity TMX Group, which also owns the junior TSX Venture Exchange, the Montreal Exchange (Canada’s financial derivatives exchange), the Alpha Exchange, and the NGX.
 
Originally founded prior to Confederation in 1861, the TSX is the oldest stock exchange in Canada, and has the most listings of any exchange in the country. A large number of the 1,500 plus listings are in the mining sector, which reflects the traditional economic profile of Canada as a resource rich country. The Canadian economy today is fuelled by many other industries, including technology.
 
These listings are not confined to equity-based corporations, but extend to structured products, funds of all kinds, and other types of securities including derivative products.
 

NEO Exchange

The NEO stock exchange is the new senior stock exchange in Canada. It opened its doors in March of 2015, focused on its principles of fairness, liquidity and transparency. NEO has taken decisive steps aimed at levelling the playing field for all investors by preventing predatory high-frequency trading practices that are widely considered to be unfair to other investors.
 

NEO Stock Exchange

NEO puts the needs of investors and public companies first through enhanced liquidity provided by its unique market making program led by firms such as RBC and National Bank Financial, greater transparency and investor access, exceptional customer service and value for money. Its efforts are building a better marketplace for all participants.
 
The exchange is owned by the RBC Dominion Securities, Barclays Corp., Invesco Canada, OMERS Capital Markets, CI Investments and other prominent financial institutions.
 
NEO means re-birth. As the name suggests, the exchange has been designed for innovative companies and funds that push the boundaries of cutting edge business practices. It is no surprise that early listings include families of exchange traded funds (ETFs) offered by the world leading Blackrock and global giant Invesco.
 
NEO is quickly becoming the listing venue of choice for ETFs and it is expected that innovative corporate listings, including Special Purpose Acquisition Corporations (SPACs), will soon follow.
 
The principles of transparency, fairness, efficiency and liquidity are what drives NEO’s business ethic.
 

1st Year Comparison Fees TSX and NEO (Based on a company with a $200M market capitalization and additional raise of $20M).

Exchange Fees TSX NEO
Initial Listing Fee $200,000 $75,000
Additional Listing Fee $42,350 $15,000
Annual Fees $36,000 $0
Total $278,350 $90,000

 

The Two Junior Stock Exchanges

 

Toronto Venture Exchange (TSX-V)

The TSXV is one of Canada’s markets for venture issuers that are looking to grow relatively early stage companies by accessing the public capital markets.
 
The Toronto Venture Exchange was created in Canada on November 29, 1999 as a result of an agreement among the Toronto, Vancouver, Alberta, Winnipeg, and Montreal exchanges to restructure the Canadian capital markets along the lines of market specialization.
 
Many of the issuers are early-stage resource exploration companies, but the exchange also began to include other more innovative industries and high technology initiatives.
 
The Winnipeg Stock Exchange and the small-cap portion of the equities market of the Montreal Exchange were also later merged into what was ultimately the Toronto Venture Exchange under the umbrella of the TMX Group.
 

Canadian Securities Exchange (CSE)

The Canadian Securities Exchange is home to more than 300 uniquely listed issues covering a broad range of industry sectors.
 
The exchange provides trade execution, smart routing, risk management, compliance and market information services for Canadian listed instruments.
 
Recognized as an exchange by the Ontario Securities Commission in 2004, the CSE is designed to facilitate the capital formation process for public companies through a streamlined approach to company regulation that emphasizes disclosure and the provision of efficient secondary market trading services for investors.
 

1st Year Comparison of Fees TSX-V and CSE (Based on a company with a $25M market capitalization with an additional listing of 2,000,000 shares at $1.50 per share).

Exchange Fees TSXV CSE
Initial Listing Fee $49,000 $13,500
Additional Listing Fee $15,750 $1,000
Annual Fees $7,300 $6,000
Total $72,050 $20,500

 
Both domestic and international companies have a choice of stock exchange in Canada from which to launch their company into the Canadian Capital Markets. This is an important decision and one must look at all aspects from a regulatory, cost and business perspective. We can assist you with that. Please contact us to discuss.

 

Facebooktwittergoogle_pluslinkedinmail