Stock Market Guide to the Montreal Stock Exchange
Located in Canada's second largest city, with a history going back to 1832, the Montreal Exchange is the country’s oldest exchange. Moving ahead with the times, the Montreal Exchange (MX) is Canada's only financial derivatives exchange, providing expertise in information technology solutions, clearing services and, of course, financial derivatives markets. The MX is owned by the TMX Group.
The exchange started off on a very informal basis in 1832, officially becoming the Montreal Stock Exchange in 1872 with the three MacDougall brothers, along with James Burnett and Frank Bond being the driving force behind its development. At that time in Canada’s history, Montreal was the indisputable metropolis of the country, and by 1910 the number of trades at the Montreal Stock Exchange totaled around $2.1 million, compared to the $900,000 at the Toronto Stock Exchange. The following years saw periods of growth and decline, with political problems in Montreal resulting in Toronto taking over the role of Canada’s metropolis and surpassing the Montreal Stock Exchange in trade. During the 1970s, language became an issue in Montreal, with the provincial government of the Province of Quebec passing a decree known as the Charter of the French Language which stipulated French as the language of business in the province. As a result, a number of major companies took their business to the Toronto Stock Exchange, where business was carried out in English. Nevertheless, the Montreal Stock Exchange continued to operate successfully, albeit on a smaller scale that in its heyday.
Highlights in the subsequent years included the name change from the Montreal Stock Exchange to the Montreal Exchange in 1982, primarily to reflect the growing importance of a wider range of financial instruments. By the end of 2001 the MX became the first traditional exchange to transition from an open outcry environment to a fully electronic, automated trading system. Another first for the MX, was becoming the first foreign exchange to run day-to-day technical operations of an American exchange when in February 2004, the Boston Options Exchange (BOX) accepted MX as the sole provider of its electronic trading systems, with MX taking a 31.4% partnership interest in BOX. In December 2007, the Montreal Exchange merged with the Toronto Exchange under the ownership of the TMX Group.
Currently the MX offers a wide range of risk management products to both individual and institutional investors in Canada and abroad, thereby serving one of the primary market segments of the global risk management industry, being that of exchange-traded derivatives. These include equity derivatives, index derivatives, currency derivatives and interest rate derivatives. As the MX clearing house, the Canadian Derivative Clearing Corporation (CDCC) manages risk exposures while providing central counterparty clearing services to clients.
Acknowledging its social responsibility, Montreal Exchange is working along with the Chicago Climate Exchange (CCX) to offer innovative solutions to the growing global challenge of climate change, with a view to setting up the first climate exchange in Montreal. Moreover, through the development of an innovative trading system called SOLA, MX is staying ahead of the pack in ground-breaking trading software.