Montreal Exchange
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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 has been located since 1965 in the Tour de la Bourse (Stock Exchange Tower), Montreal's third-tallest building.
On December 10th, 2007 TSX Group announced that it will acquire Montreal Exchange Inc. for C$1.31 Billion [1] [2] [3]
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[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.
At this time Montreal truly was the metropolis of Canada. The Montreal Stock Exchange was growing quickly. By 1910, the number of trades amounted to about $2.1 million while 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 and Power.
At that time, many major financial institutions established their headquarters in prestigious buildings on and around St. James Street which was the "Wall Street of Canada" until the 1970s. 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.
For the terrorist Front de libération du Québec, the Montreal Stock Exchange represented a bastion of English-Canadian power. On February 13, 1969 they set off a massive bomb at the Stock Exchange that blew out the northeast wall and seriously injured 27 people. They also bombed many anglophone neighbourhoods in Montreal, such as 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 pleaded guilty to the bombing, while Bachand and Villeneuve fled the country and made their way to France.
In addition to security concerns, language became a major issue in the 1970s. In 1977 the provincial government of Québec passed the Charter of the French Language, which decreed that the language of work in Québec would be French. With the majority of Canadian domestic and international business being carried out in English, this law effectively drove all stock trading in major companies to the Toronto Stock Exchange, where business could be done in English.
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).
In December 2007, the Montreal and Toronto exchanges merged[1].
