Montreal Exchange
From Wikipedia, the free encyclopedia
The Montreal Exchange (Bourse de Montréal, formerly Montreal Stock Exchange) is a futures exchange, located in Montreal, that trades in derivatives such as futures contracts and options. It is located since 1965 in the Tour de la Bourse (Stock Exchange Tower), Montreal's third-tallest building.
[edit] History
The story of the first exchange in Canada began in 1832 as an informal stock exchange at the Exchange Coffee House in Montreal, Canada. 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 (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.
The Montreal Stock Exchange, which is situated in the second-largest city in Canada is growing quickly at dawn of the 20th Century. In 1910, the number of trades that were made amounted to about $2.1 million while the Toronto Stock Exchange only amounted to $900,000.
It was the time when Montreal truly was the metropolis of Canada even if Toronto was growing in importance, Montreal really dominated. The prosperity of the Montreal Stock Exchange led to the creation of major corporations like Dominion Textile and Montreal Light, Heat and Power.
At that time, many majors financial institutions established their headquarters in prestigious buildings on and around St. James Street which was the Wall Street of Canada until the 70's. In 1903, the same year as the construction of New York's now famous Exchange Building, The Montreal Stock Exchange commissioned its architect, George B. Post, to design its magnificent building on St. Francois-Xavier Street.
The first World War marks the end of Canada's dependence to London's Market. By contributing greatly to the war effort, Canada's economy is greatly strengthened by the war. All along during the 20's, Montreal's Market experienced an exponantial growth reaching 3,5 millions.
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.
But awakening was brutal on October 29th, 1929. The loss was evaluated at 5 billions at that time. The 1929's Crisis really hit Montreal especially hard. In 1934, due to multiples factors, the Toronto Stock Exchange surpassed Montreal. Still, Montreal's position in Canadian's economy was recovered and was as strong as ever and it was not until the mid-70's that Toronto became the metropolis of Canada after a decade of trouble in Montreal.
For the terrorist Front de libération du Québec, the Montreal Stock Exchange represented a bastion of English-Canadian power and on February 13, 1969 set off a massive bomb at the Stock Exchange that blew out the northeast wall and seriously injured thirty-eight people. They also bombed many anglophones places in Montreal like Westmount. The police investigation led to warrants for the arrest of FLQ members Pierre-Paul Geoffroy, Raymond Villeneuve and Mario Bachand. Geoffroy was eventually arrested and plead guilty to the bombing while Bachand and Villeneuve fled the country and made their way to France.
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 (TSX), and in the trading of smaller companies to the new 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).
