Business, Legal & Accounting Glossary
The Montreal Exchange (Bourse de Montréal) or simply MX is a futures and options (derivatives) exchange located in the Canadian city of Montreal. Along with equities, it offers derivative products in currencies, indices, Exchange Trade Funds (ETFs), energy and interest rates. Owned by TMX Group, a Toronto based company, it is housed in the third tallest building in Montreal, the Tour de la Bourse (Stock Exchange Tower) since 1965.
Trading in futures and options was first introduced to Montreal traders in 1832 when trading took place informally at the Exchange Coffee House. The setting of a formal stock exchange in Montreal was the result of the efforts of Lorn MacDougall, his brothers Hartland St. Clair MacDougall and George Campbell MacDougall along with James Burnett and Frank Bond. Together, they established the Montreal Stock Exchange, as it was known then, in 1872. The name was used until 1982 when it was changed to Montreal Exchange.
Lorn MacDougall, voted by the shareholders as the first chairman of the Governing Committee, continued to hold the position till 1883 when he had to retire due to ill health.
In 1910, traded volume on the Montreal Exchange was to the tune of $2.1 million. The comparative figure for the Toronto Stock Exchange (TSX) was only $900,000. The growth, popularity and rising profits of The Montreal Exchange led to the formation of large Canadian corporations such as Montreal Light, Heat and Power and Dominion Textile.
This was also around this time that many financial institutions set up their offices in and around St. James Street. When the New York’s now-famous Exchange Building was being constructed by the architect George B. Post in 1903, the Montreal Exchange also commissioned him to design an imposing building on St. Francois-Xavier Street for housing the expanding exchange.
The Canadian economy received a major boost when the country contributed to the war effort during World War I, which marked the end of the country’s dependence on the London Market. The Montreal market experienced tremendous growth in the 1920s and its volumes reached $3.5 million. The market had grown more than 50% in a decade.
The Montreal Curb Market was established for trading in speculative and small stocks. The idea was that if the market proved successful, it would eventually be merged with the main exchange. In 1953, the name of the Montreal Curb Market was changed to the Canadian Stock Exchange.
The Great Depression of 1929 dealt a severe blow to the Montreal Exchange. This, along with many other factors, led to TSX surpassing the Montreal Exchange in terms of traded volumes. Montreal retained its place of pride in the Canadian economy until the 1970s. Montreal experienced political troubles due to which, after ten long years, it lost its status of Canada’s economic capital to Toronto.
Regional aspirations and language became the major cause of the decline of the Montreal exchange. Front de libération du Québec, a Marxism Leninism communist organization committed to the Quebec nationalism and creation of an independent state, considered the Montreal Exchange as a symbol of Anglo-Canadian power. They blew up the northwest wall of the exchange building by setting off a bomb on February 13, 1969. Apart from the threat from terrorist organizations, language was a major political issue in the 1970s. Although the majority of domestic and international business was being carried on in English, Quebec’s provincial government passed the Charter of French Language decreeing that French would be the language of work. The Toronto Stock Exchange offered a convenient alternative as business was being conducted in the English language there. The final blow was struck when many major companies shifted to trade stock on the Toronto Stock Exchange.
Originally, formed as Montreal Curb Exchange in 1926 for dealing in junior and speculative stock, the Canadian Stock Exchange (named changed in 1953) was merged as per the original plan, with the Montreal Stock Exchange (as it was known then). Later in 1999, the small-cap portion of the Montreal Exchange, along with the Alberta and Vancouver Stock Exchanges was merged into the Canadian Venture Exchange. The Canadian Dealing Network and Winnipeg Stock Exchange were also merged with the Canadian Venture Exchange, now known as TSX Venture Exchange, a company based in Calgary but with offices in Montreal as well.
Established on July 12, 2006 by a collaboration of the Montreal Exchange and the now-defunct Chicago Climate Exchange the Montreal Climate Exchange (MCeX) trades in future contracts on carbon credits. Carbon credits are certificates representing the right to emit a specified amount of carbon dioxide or the mass of other greenhouse gas equivalent to a specified amount of carbon dioxide. The MCeX is Canada’s first regulated climate market.
Carbon credits are part of a national and international attempt to lessen the growth of greenhouse gases. One carbon credit is equivalent of emission of one tone of carbon dioxide or equivalent gases. Government authorities issue credits of regulated emitters at the end of a compliance period. These can be put up for sale by emitters or kept for future compliances. Carbon credits put up for sale can be bought by regulated industrial emitters on the domestic climate exchange with the purpose of complying with the regulations pertaining to emissions of greenhouse gases. MCeX offers futures contracts equal to 100 carbon credits or one metric ton of carbon dioxide or equivalent gases.
The MCeX has appointed Orbeo, TD Securities Inc. and TradeLink LLC as its approved market makers for carbon credits.
Bourse de Montréal, MX
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This glossary post was last updated: 14th April, 2020 | 0 Views.