Montreal Exchange
Encyclopedia
The Montreal Exchange or MX (Bourse de Montréal, formerly Montreal Stock Exchange (MSE)) is a derivatives exchange, located in Montreal
, that trades futures contract
s and options
on equities, indices, currencies, ETFs, energy and interest rates. Since 1965, it has been located in the Tour de la Bourse
(Stock Exchange Tower), Montreal's third-tallest building. It is owned by Toronto
- based TMX Group.
at the Exchange Coffee House in Montreal. In 1872, Lorn MacDougall, along with his brothers Hartland St. Clair MacDougall and George Campbell MacDougall, James Burnett and Frank Bond were the driving force behind the creation of the Montreal Stock Exchange (a name that was used until 1982 when it became the Montreal Exchange). The shareholders voted Lorn MacDougall its first Chairman of the Governing Committee, a position he held until poor health forced him to retire in 1883.
By 1910, the number of trades amounted to about $2.1 million whereas the Toronto Stock Exchange only amounted to $900,000. The prosperity of the Montreal Stock Exchange led to the creation of major corporations like Dominion Textile
and Montreal Light, Heat & Power
.
At that time, many major financial institutions established their headquarters on and around St. James Street. In 1903, the same year as the construction of New York's now famous Exchange Building, the Montreal Stock Exchange commissioned the same architect, George B. Post, to design its magnificent building on St. Francois-Xavier Street.
World War I
marked the end of Canada's dependence on London
's market. By contributing greatly to the war effort, Canada's economy was greatly strengthened by the war. All through the 1920s, Montreal's market experienced strong growth, reaching $3.5 million.
In 1926, the "Montreal Curb Market
" was created to allow trading in speculative and junior stocks. If successfully grown, they could apply for a transfer to the main Exchange. In 1953, the Curb Market was renamed the Canadian Stock Exchange
.
The 1929 crisis hit Montreal especially hard. In 1934, due to multiple factors, the Toronto Stock Exchange surpassed Montreal. Still, Montreal's position in Canada's economy recovered, and it was not until the mid-1970s that Toronto became the metropolis of Canada after a decade of political troubles in Montreal.
group Front de libération du Québec
, the Montreal Stock Exchange represented a bastion of Anglo-Canadian power. On February 13, 1969 they set off a bomb at the Stock Exchange that blew out the northeast wall and injured 27 people.
In addition to security concerns, language became a major issue in the 1970s. In 1977, the provincial government of Quebec passed the Charter of the French Language
, which decreed that the language of work in Quebec would be the French language
. With the majority of Canadian domestic and international business being carried out in the English language
, this law effectively drove some major companies to trade stock at the Toronto Stock Exchange
, where business could be done in English.
In 1999, the Vancouver, Alberta, Toronto and Montreal exchanges agreed to restructure the Canadian capital markets along the lines of market specialization, resulting in the Montreal Exchange assuming the position of Canadian Derivatives Exchange for the following 10 years. Trading in the shares of large companies was transferred to the Toronto Stock Exchange
(TSX), and in the trading of smaller companies to the new Canadian Venture Exchange (now: TSX Venture Exchange
). This change, which reflected the economic reality that most equity trading had moved to the TSE, caused consternation among those in favour of political independence for the province of Quebec
.
At the end of 2001, the Exchange had completed its migration from an open outcry environment to a fully automated trading system, becoming the first traditional exchange in North America to complete this transformation. In the process, it modified the market model for trading, from a traditional specialist model to a competing market making model for the equity option market.
In February 2004, the Exchange became the sole provider of electronic trading systems and support for the Boston Options Exchange
(BOX), making it the first foreign exchange to be responsible for the day-to-day technical operations of an American exchange. That contract now provides the Montreal Exchange with a significant part of its revenue. The Montreal Exchange has a 31.4 % stake in the Boston Option Exchange (BOX), percentage that has since risen to over 51% (as of September 2009).
On December 10, 2007, TSX Group announced that it had acquired Montreal Exchange Inc. for C$1.31 Billion. The acquisition was completed on May 1, 2008 and the corporation subsequently was renamed TMX Group Inc. In 2008, Montréal Exchange Inc. and TSX Group Inc. merged to form TMX Group.
On February 9, 2011, the London Stock Exchange
announced that they had agreed to merge with the TMX Group, Montreal Exchange's parent, hoping to create a combined entity with a market capitalization of $5.9 trillion (£3.7 trillion). Xavier Rolet
, who currently is CEO of the LSE Group, would head the new enlarged company, while TMX Chief Executive Thomas Kloet would become the new firm president. Based on data from December 30, 2010 the new stock exchange would be the second largest in the world with a market cap 48% greater than the Nasdaq
. 8 of the 15 board members of the combined entity will be appointed by LSE, 7/15 by TMX. The provisional name for the combined group would be LTMX Group plc.
On June 13, 2011, a rival, and hostile bid from the Maple Group of Canadian interests, was unveiled. A cash and stock bid of $3.7 billion CAD, in hopes of blocking the LSE Group's takeover of TMX. The group is composed of the leading banks and financial institutions of Canada.
(CCX). It trades futures contracts on greenhouse gas
es. Established on July 12, 2006 and launched on May 30, 2008, MCeX is the first regulated environmental market in Canada.
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
, that trades futures contract
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
s and options
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
on equities, indices, currencies, ETFs, energy and interest rates. Since 1965, it has been located in the Tour de la Bourse
Tour de la Bourse
La tour de la Bourse is an International Style skyscraper by Luigi Moretti and Pier Luigi Nervi at 800 Victoria Square in Montreal, Quebec, connected by the underground city to Square-Victoria Metro Station...
(Stock Exchange Tower), Montreal's third-tallest building. It is owned by Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
- based TMX Group.
History
Montreal Stock Exchange (1872-1982)
The first exchange in Canada began in 1832 as an informal stock exchangeStock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
at the Exchange Coffee House in Montreal. In 1872, Lorn MacDougall, along with his brothers Hartland St. Clair MacDougall and George Campbell MacDougall, James Burnett and Frank Bond were the driving force behind the creation of the Montreal Stock Exchange (a name that was used until 1982 when it became the Montreal Exchange). The shareholders voted Lorn MacDougall its first Chairman of the Governing Committee, a position he held until poor health forced him to retire in 1883.
By 1910, the number of trades amounted to about $2.1 million whereas the Toronto Stock Exchange only amounted to $900,000. The prosperity of the Montreal Stock Exchange led to the creation of major corporations like Dominion Textile
Dominion Textile
The Dominion Textile Inc. or Domtex was a major Canadian textile manufacturer that was founded in 1905 and closed in 1998 when its remains were purchased by the American Polymer Group, at the time headed by Jerry Zucker....
and Montreal Light, Heat & Power
Montreal Light, Heat & Power
The Montreal Light, Heat and Power Company was a utility company operating the electric and gas distribution monopoly in the area of Montreal, Quebec, Canada until its nationalization by the government of Quebec in 1944, under a law creating the Quebec Hydroelectric Commission, also known as...
.
At that time, many major financial institutions established their headquarters on and around St. James Street. In 1903, the same year as the construction of New York's now famous Exchange Building, the Montreal Stock Exchange commissioned the same architect, George B. Post, to design its magnificent building on St. Francois-Xavier Street.
World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
marked the end of Canada's dependence on London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
's market. By contributing greatly to the war effort, Canada's economy was greatly strengthened by the war. All through the 1920s, Montreal's market experienced strong growth, reaching $3.5 million.
In 1926, the "Montreal Curb Market
Montreal Curb Market/Canadian Stock Exchange
The Montreal Curb Market was a stock exchange created in 1926 in Montreal, Canada for trading in stocks that were considered to be too speculative or junior to be traded on the Bourse de Montréal...
" was created to allow trading in speculative and junior stocks. If successfully grown, they could apply for a transfer to the main Exchange. In 1953, the Curb Market was renamed the Canadian Stock Exchange
Montreal Curb Market/Canadian Stock Exchange
The Montreal Curb Market was a stock exchange created in 1926 in Montreal, Canada for trading in stocks that were considered to be too speculative or junior to be traded on the Bourse de Montréal...
.
The 1929 crisis hit Montreal especially hard. In 1934, due to multiple factors, the Toronto Stock Exchange surpassed Montreal. Still, Montreal's position in Canada's economy recovered, and it was not until the mid-1970s that Toronto became the metropolis of Canada after a decade of political troubles in Montreal.
Decline
For the terroristTerrorism
Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
group Front de libération du Québec
Front de libération du Québec
The Front de libération du Québec was a left-wing Quebecois nationalist and Marxist-Leninist paramilitary group in Quebec, Canada. It was active between 1963 and 1970, and was regarded as a terrorist organization for its violent methods of action...
, the Montreal Stock Exchange represented a bastion of Anglo-Canadian power. On February 13, 1969 they set off a bomb at the Stock Exchange that blew out the northeast wall and injured 27 people.
In addition to security concerns, language became a major issue in the 1970s. In 1977, the provincial government of Quebec passed the Charter of the French Language
Charter of the French Language
The Charter of the French Language , also known as Bill 101 and Loi 101, is a law in the province of Quebec in Canada defining French, the language of the majority of the population, as the only official language of Quebec, and framing fundamental language rights for everyone in the province...
, which decreed that the language of work in Quebec would be the French language
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
. With the majority of Canadian domestic and international business being carried out in the English language
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
, this law effectively drove some major companies to trade stock at the Toronto Stock Exchange
Toronto Stock Exchange
Toronto Stock Exchange is the largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalisation. Based in Canada's largest city, Toronto, it is owned by and operated as a subsidiary of the TMX Group for the trading of senior equities...
, where business could be done in English.
Montreal Exchange (1982-present)
In 1982, the Montreal Stock Exchange changed its name to the Montreal Exchange to reflect the growing importance of financial instruments other than stocks–primarily options and futures–on its trading floor.In 1999, the Vancouver, Alberta, Toronto and Montreal exchanges agreed to restructure the Canadian capital markets along the lines of market specialization, resulting in the Montreal Exchange assuming the position of Canadian Derivatives Exchange for the following 10 years. Trading in the shares of large companies was transferred to the Toronto Stock Exchange
Toronto Stock Exchange
Toronto Stock Exchange is the largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalisation. Based in Canada's largest city, Toronto, it is owned by and operated as a subsidiary of the TMX Group for the trading of senior equities...
(TSX), and in the trading of smaller companies to the new Canadian Venture Exchange (now: TSX Venture Exchange
TSX Venture Exchange
The TSX Venture Exchange is a stock exchange in Canada. It is headquartered in Calgary, Alberta and has offices in Toronto, Vancouver, and Montreal. All trading through the Exchange is done electronically, so the Exchange does not have a "trading floor"...
). This change, which reflected the economic reality that most equity trading had moved to the TSE, caused consternation among those in favour of political independence for the province of Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
.
At the end of 2001, the Exchange had completed its migration from an open outcry environment to a fully automated trading system, becoming the first traditional exchange in North America to complete this transformation. In the process, it modified the market model for trading, from a traditional specialist model to a competing market making model for the equity option market.
In February 2004, the Exchange became the sole provider of electronic trading systems and support for the Boston Options Exchange
Boston Options Exchange
Boston Options Exchange Group, LLC is an automated stock exchange owned and operated by the TMX Group. As an equity options market, it provides electronic order matching services to stock brokers and traders.- Overview :...
(BOX), making it the first foreign exchange to be responsible for the day-to-day technical operations of an American exchange. That contract now provides the Montreal Exchange with a significant part of its revenue. The Montreal Exchange has a 31.4 % stake in the Boston Option Exchange (BOX), percentage that has since risen to over 51% (as of September 2009).
On December 10, 2007, TSX Group announced that it had acquired Montreal Exchange Inc. for C$1.31 Billion. The acquisition was completed on May 1, 2008 and the corporation subsequently was renamed TMX Group Inc. In 2008, Montréal Exchange Inc. and TSX Group Inc. merged to form TMX Group.
On February 9, 2011, the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
announced that they had agreed to merge with the TMX Group, Montreal Exchange's parent, hoping to create a combined entity with a market capitalization of $5.9 trillion (£3.7 trillion). Xavier Rolet
Xavier Rolet
-Early life and career:Rolet was born in Aix-les-Bains, France. He is the eldest of three children born to military parents. His early life was spent in Algeria and France. He served as a second lieutenant and an Instructor at the French Air Force Academy and earned an MBA from Columbia Business...
, who currently is CEO of the LSE Group, would head the new enlarged company, while TMX Chief Executive Thomas Kloet would become the new firm president. Based on data from December 30, 2010 the new stock exchange would be the second largest in the world with a market cap 48% greater than the Nasdaq
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
. 8 of the 15 board members of the combined entity will be appointed by LSE, 7/15 by TMX. The provisional name for the combined group would be LTMX Group plc.
On June 13, 2011, a rival, and hostile bid from the Maple Group of Canadian interests, was unveiled. A cash and stock bid of $3.7 billion CAD, in hopes of blocking the LSE Group's takeover of TMX. The group is composed of the leading banks and financial institutions of Canada.
Montreal Climate Exchange
The Montreal Climate Exchange or MCeX was started as a joint venture between the Montreal Exchange and the now-defunct Chicago Climate ExchangeChicago Climate Exchange
The now defunct Chicago Climate Exchange was North America’s only voluntary, legally binding greenhouse gas reduction and trading system for emission sources and offset projects in North America and Brazil....
(CCX). It trades futures contracts on greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
es. Established on July 12, 2006 and launched on May 30, 2008, MCeX is the first regulated environmental market in Canada.
Background
As part of the 2008 federal climate plan, in addition to internal reductions, large regulated industrial emitters in Canada are able to choose to buy emission units on the domestic carbon market. Regulated emitters’ credits are issued by government authorities at the end of a compliance year to regulated emitters that reduce the intensity of their GHG emissions below the target established by the federal government. These emitters are able to sell their credits on the market or keep them for subsequent compliance years. Futures contracts sold on the MCeX are equal to 100 Canada carbon dioxide equivalent units (one metric ton of carbon dioxide equivalent).History
- On July 12, 2006 the Montréal Climate Exchange was established as a partnership between the MX and the CCX. The two exchanges finalized the preliminary agreement announced in Montreal on Dec. 7, 2005 during the first meeting of the parties to the United Nations Framework Convention on Climate ChangeUnited Nations Framework Convention on Climate ChangeThe United Nations Framework Convention on Climate Change is an international environmental treaty produced at the United Nations Conference on Environment and Development , informally known as the Earth Summit, held in Rio de Janeiro from June 3 to 14, 1992...
. - On Oct. 2, 2006 the exchange said the federal government appeared to be moving in the right direction on emissions regulation.
- On Oct. 23, 2006 the exchange promoted a market-based solution to help meet environmental challenges.
- On May 10, 2007 the MX filed for regulatory approval of market rules for trading of MCeX environmental products.
- On July 25, 2007 the Montreal Climate Exchange announced its carbon futures contractContractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
would be launched by year end. - On March 14, 2008, the Montreal Climate Exchange announced plans to launch trading of futures contractFutures contractIn finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
s on Canada carbon dioxide equivalent (CO2e) units on May 30, 2008, subject to regulatory approval.
See also
- List of futures exchanges
- List of stock exchanges
- European Climate ExchangeEuropean Climate ExchangeThe European Climate Exchange manages the product development and marketing for ECX Carbon Financial Instruments , listed and admitted for trading on the ICE Futures Europe electronic platform. It is no longer a subsidiary of the Chicago Climate Exchange but rather a sister company...
- International Petroleum ExchangeInternational Petroleum ExchangeThe International Petroleum Exchange, based in London, was one of the world's largest energy futures and options exchanges. Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity ,...