CANADA’S FOUR STOCK EXCHANGES

Like many major capital market centres around the world, Canada has multiple stock exchanges to publicly list and facilitate the buying and selling of securities.  Canada’s Stock Exchanges are as follows:  Toronto Stock Exchange (“TSX”), the Neo Exchange (“Neo”), Toronto Venture Exchange (“TSXV”), and the Canadian Securities Exchange (“CSE”).   Additionally, there are also numerous alternative trading systems that facility trading of securities in Canada’s four stock exchanges.   Consequently, multiple marketplaces encourage competition and introduce new solutions and new technologies.  As a result, this leads to a better experience as a public company – enhanced quality of trading, lower fees and increased liquidity.

TSX, TSXV, Neo, CSE, Toronto Stock Exchange, Toronto Venture Exchange, Neo Exchange, Canadian Securities Exchange, Alternative Trading Systems, ATS'

TWO SENIOR STOCK EXCHANGES

There are currently two senior stock exchanges also known as non-venture issuer exchanges in Canada. They 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.  It 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 1,630 plus listings are in the mining sector, which reflects the traditional economic profile of Canada as a resource rich country.  However, sectors like technology fuel the Canadian economy today.

These listings are not confined to equity-based corporations, but extend to structured products, funds of all kinds, and other types of securities.  These include derivative products, ETFs (“Exchange Traded Funds”) and Special Purpose Acquisition Corporations (“SPACs”).

TMX group also operates the TSX Alpha Exchange which provides trading TSX and TSXV securities.

Learn more about the Toronto Stock Exchange – TSX

Neo Stock Exchange – Neo

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.  Uniquely, NEO has taken decisive steps aimed at leveling the playing field for all investors by preventing predatory high-frequency trading practices which are unfair to other investors.

NEO means re-birth.  As the name suggests, the exchange is for innovative companies and funds that push the boundaries of cutting-edge business practices.

The structure of the listing standards for Neo are similar to NASDAQ’s as well as more stringent listing standards than other exchanges.

NEO currently has just over 70 listings with a majority of them being ETFs.  The exchange has approximately 17 corporate listings with 4 of them being SPACs.

In addition to Neo listed securities the Neo Exchange also provides trading in CSE, TSX and TSXV securities.  Moreover, three separate books provide this trading, which include NEO-N, NEO-L, NEO-D and a crossing facility.

Learn more about the Neo Exchange – Neo

THE TWO JUNIOR STOCK EXCHANGES

Canada has two junior stock exchanges otherwise known as venture issuer exchanges.

Toronto Venture Exchange – TSXV

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.  However, this was for the purpose to restructure the Canadian capital markets along the lines of market specialization.

Furthermore, the Winnipeg Stock Exchange and the small-cap portion of the equities market of the Montreal Exchange merged into what was ultimately the Toronto Venture Exchange under the umbrella of the TMX Group.

Many of the issuers are early-stage resource exploration companies.  However, the exchange also began to include other more innovative industries and high technology initiatives.  The TSXV has over 1650 corporate listings.

Learn more about the Toronto Venture Exchange – TSXV

Canadian Securities Exchange – CSE

The Canadian Securities Exchange is home to more than 600 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 enables a cost-efficient capital formation process for public companies.  It is accomplished through a streamlined approach to company regulation.  As a result, this approach emphasizes disclosure and the provision of efficient secondary market trading services for investors.

In addition, CSE provides additional access for the trading of TSX and TSXV securities.

Learn more about the Canadian Securities Exchange – CSE

Alternative Trading Systems (“ATS’”) and other Exchanges

Additionally, there are Alternative Trading Systems and other Exchange recognized by the securities commissions in Canada.  Many of these platforms are for the trading of options and/or futures but we will focus on the trading of equities.

Equity ATS’

Liquidnet Canada

Liquidnet is a registered investment dealer with Investment Industry Regulatory Organization of Canada (“IIROC”).   As well, it is regulated by IIROC as an Alternative Trading System.  It provides trading in securities on the TSX and TSXV for Participants aka registered investment dealers and Access Persons.  Access persons are those who is a subscriber to an ATS or a Quotation and Trade Reporting Systems (“QTRS”).  Pre-trade information on order size, pricing, or on Participants and Access Persons is not available.

Instinet Canada Cross (“ICX”)

ICX provides trading to Participants in Canadian publicly traded companies.   ICX provides two types of orders being VWAP cross and CBX Canada (continuous matching).  Like Liquidnet it provides no pre-trade information on participants, order size and pricing.

Tradelogiq Markets Inc. (“TMI”)

TMI manages two ATS’ being Omega ATS and Lynx ATS.   Both of them provide trading in TSX, TSXV and CSE securities.     In addition, order price and volume information are available.

TriAct Canada Marketplace

Triact operates MATCH Now which is an ATS that provides trading of securities listed on TSX, TSXV, CSE and Neo.   As with Liquidnet and Instinet there is no pre-trade information on Participants, order size or pricing.

Other Exchanges

Nasdaq CXC Limited (“Nasdaq Canada”)

Nasdaq Canada is a recognized stock exchange that provides trading in TSX, TSXV and CSE securities.  However, Nasdaq Canada does not have its own listed market or securities.  Furthermore trading is through three separate trading books, namely CXC, CX2 and CXD.

Conclusion

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 by filling out the form on the right.