Our partner, XM, lets you access a free demo account to apply your knowledge.
No hidden costs, no tricks.
The Toronto Stock Exchange (TSX) is the premier securities exchange in Canada, which has long been attracting billions in local and foreign capital - thanks to its broad selection of mining and alternative biotechnology stocks. TSX is also one of the oldest organized stock exchanges in the developed world. Here is a basic dossier:
The Toronto Stock Exchange is the senior marketplace owned by the TMX Group, which also owns and operates the TSX Venture Exchange, or TSXV, which is a venture capital marketplace for emerging stocks.
"TMX is a main street story, because what we're really about is actually being helping those companies raise raise capital, expand, grow, hire, and we've been for 170 years an engine of the Canadian economy" - John McKenzie
The main TSX market is home to 1,640 stocks, while TSXV has 1,649 official listings. However, the TSXV is much smaller than the TSX in terms of market capitalization; only amassing $78 billion in market value.
Similarly to the London Stock Exchange, Toronto offers a wide variety of multinational corporations that are double-listed on the exchange.
The Toronto Stock Exchange has some stringent requirements for prospective listing candidates based on their industry and initial market capitalization. Some of the general requirements include:
Please note, that these are only the general requirements applicable to all stocks listed on the TSX, which upholds a number of other requirements and regulations for companies representing specific industries.
In general, there are five routes to obtaining a listing on the TSX:
The Toronto Stock Exchange generates revenue by charging one-time and recurring fees to companies listed on the exchange, while also providing a number of auxiliary services to institutional investors:
The Toronto Stock Exchange has a relatively simple fee structure, which can be broken down into the following:
For trading applicants:
For listing applicants on the TSX:
For listing applicants on the TSXV:
The S&P/TSX 60 index is the most followed index on the Toronto Stock Exchange, tracking the 60 largest stocks listed on the exchange. The index is market capitalization-weighted.
The S&P/TSX 60 Index is a capitalization-weighted index that tracks 60 of the largest companies listed on the Toronto Stock Exchange. The index is maintained by the Canadian S&P Index Committee, which is a unit of Standard & Poor’s. A bulk of the weight of the index is attributable to the energy, financial, and industrial sectors. The index was officially launched on December 30, 1998. The index is part of the S&P 1200 Global Index.
The S&P/TSX index is represented by 60 of the largest public companies that list their shares on the Toronto Stock Exchange. Here’s how the index can be broken down into market sectors by weighting:
As already mentioned in previous sections, the S&P/TSX index is also heavily weighted in favor of the financial services and energy sectors.
Let’s look at the top 10 constituents of the S&P/TSX 60 by index weight:
|Royal Bank of Canada||RY||Financials|
|Canadian Pacific Railway Ltd||CP||Industrials|
|Canadian National Railways||CNR||Industrials|
|Bank of Montreal||BMO||Financials|
|Canadian Natural Resources Limited||CNQ||Energy|
|Bank of Nova Scotia Halifax||BNS||Financials|
|Shopify Inc||SHOP||Information Technology|
The S&P/TSX Composite Index is the benchmark index of the Toronto Stock Exchange that represents over 70% of the market capitalization of the TSX. The index includes 250 companies in total and is a replacement for the prior TSE 300 index.
The S&P/TSX Composite Index is the second-most followed index on the Toronto Stock Exchange, which is frequently used as a measure of the overall performance of the exchange.
For stocks to be eligible for inclusion in the index, they must represent a minimum of 0.05% of the index and must trade for an average price of at least 1 CAD over the past three months. The trading volume in dollar value, as well as the number of transactions, must be at least 0.025% of all trading volume. To balance the index, there is a 15% cap in place.
Similarly to the S&P/TSX 60 Index, the Composite Index is dominated by a handful of industries, such as industry, financials, and energy.
Here’s how the index is weighted by sector:
The TSX Venture Exchange, or TSXV, is the electronic venture exchange of the Toronto Stock Exchange and is home to over 1,600 small-cap stocks that are not able to satisfy the listing requirements of the TSX.
The listing requirements on the TSXV are less stringent and listing fees are also considerably lower. Launched in 1999, the TSXV’s total market capitalization amounts to $78 billion. However, a lot of the stocks listed on the TSXV have low trading volumes and can be highly volatile, with a higher risk of failure.
The Royal Bank of Canada (TSE:RY) is the largest stock listed on the TSX, with nearly $133.4 billion in market capitalization.
The TSX and TSXV are home to a combined stock count of over 3,400. The TSX is home to 1,600 individual stocks that represent various industries, such as energy, industrials, financial services, etc.
The financial services sector is the largest by weighting on the Toronto Stock Exchange and accounts for over 31% of the S&P/TSX Composite Index.