1. Canada Equity Market

2. Overview Introduction (~5 minutes) History Today Participants (~4 minutes) Rules and Regulations (~7 minutes) Structure (~8 minutes) Differences between Canada and USA (~4 minutes) Conclusion/Questions (~2 mins)

3. History Started 1832 Traded in coffee house in Montreal 1874 – Montreal stock exchange 1878 – Toronto stock exchange 1980’s – Canadian Banks and trust companies can now have ownership

4. History Continued 1999 – CDNX created Natural resources CDNX was bought by the Toronto stock exchange. TSX was bought by TMX Group Inc. CDNX  Toronto Venture Exchange.

5. Today 3 main marketplaces: S&P/TSX Toronto Venture Exchange Montreal Exchange Other market places: CSE Alpha exchange Bloomberg Tradebook Chi-X Canada CX2 Canada ATS …(6 more)

6. Assets traded: Cash and financial derivatives as well as fixed income, energy, natural gas, technology, natural resources Derivatives Fixed income securities Energy Natural gas Market cap of over 889 billion USD.

7. Participants

8. As of 2014, there are 187 firms – 17 are foreign owned. 6 largest participants (owners followed by the firm): BMO BMO Nesbitt Burns Canadian Imperial Bank of Commerce CIBC World Markets National Bank of Canada National Bank Financial Royal Bank of Canada RBC Dominion Securities ltd The Bank of Nova Scotia scotia capital TD Bank Financial Group TD Securities

9. 73% 6 largest firms 15% Retail firms 12% Institutional firms Participants

10. Regulation Federal and provincial regulation Federal CSA: Investment Industry Regulatory Organization of Canada (IIROC) Mutual Funds Dealers Association (MFDA) Provincial (3 largest) Ontario Securities Commission British Columbia Securities Commission Autorité des marchés financiers

11. Regulation CSAIIROCProvincial MFDAProvincial *Total of 13 regulators including Revenue Canada

12. Regulation Canadian Securities Association Create uniform rules and regulations Manages approval process In charge of developing IT (nationally) Enforces rules Passport System (except Ontario) Easy Fast Cheap

13. Regulation IIROC Self-regulatory CSA Standards Protect investors Help prevent fraud Canadian Investor Protection Fund

14. Regulation MFDA Self-regulatory Not licensed under Quebec regulator Cooperative agreement CSA IIROC Investor Protection Regulates mutual fund distribution

15. Regulation Problems Difficult coordination Slow Increased risk International Issues Small resistance in collaboration Inefficient Costly

16. Current Trend 80% of share traded on TMX Group 3% trades in dark pools Banking, mining and energy Heavy dependency on commodities

17. Structure Toronto Stock Exchange Exempt issuers Non-exempt issuers TSX Venture Exchange Tier 1 Tier 2 NEX Canadian National Security Exchange

18. Stock Exchange---Four Primary Methods IPO REVERSE TAKE-OVER QUALIFYING TRANSACTION DRICTLY LISTING

19. The Difference between Canada and US Stock Market Sector weights for Canadian and US markets

20. The Difference between Canada and US Stock Market Smaller market size Smaller market capitalizations Concentrated sectors Less dark poor trading

21. References (n.d.). Retrieved March 17, 2015, from http://iiac.ca/wp-content/uploads/HFTs-and-the-Structural- Differences-Between-Canadian-and-U-S-Equity-Markets1.pdfhttp://iiac.ca/wp-content/uploads/HFTs-and-the-Structural- Differences-Between-Canadian-and-U-S-Equity-Markets1.pdf Canadian Investor Protection Fund - Home. (n.d.). Retrieved March 17, 2015, from http://www.cipf.cahttp://www.cipf.ca Commissoin des valeurs mobilières du Manitoba. (n.d.). Retrieved March 17, 2015, from http://www.msc.gov.mb.ca http://www.msc.gov.mb.ca Department of Finance Canada * Ministère des Finances Canada. (n.d.). Retrieved March 17, 2015, from http://www.fin.gc.cahttp://www.fin.gc.ca Home. (n.d.). Retrieved March 17, 2015, from http://www.bankofcanada.ca/http://www.bankofcanada.ca/ Investment Industry Regulatory Organization of Canada (IIROC). (n.d.). Retrieved March 17, 2015, from http://www.iiroc.ca http://www.iiroc.ca Investment Industry Regulatory Organization of Canada (IIROC). (n.d.). Retrieved March 17, 2015, from http://www.iiroc.ca http://www.iiroc.ca OSC-IIROC Market Structure Conference. (n.d.). Retrieved March 17, 2015, from http://www.osc.gov.on.ca/en/NewsEvents_osc-iiroc-msc_index.htm http://www.osc.gov.on.ca/en/NewsEvents_osc-iiroc-msc_index.htm Task Force to Modernize Securities Legislation in Canada. (n.d.). Retrieved March 17, 2015, from http://www.tfmsl.ca/ http://www.tfmsl.ca/