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Why is the Toronto Stock Exchange (TSX) becoming a public company? Are any other stock exchanges that are public companies?

The Toronto Stock Exchange (TSX) announced in May 2001 its intention to become a publicly listed company. While the Ontario Securities Commission still needs to approve the TSX’s proposed change in status, it is expected that the IPO will take place in the fall of 2002. The TSX’s IPO will increase the separation between the exchange’s ownership and its clients.

Quite a few changes in the Canadian securities markets have occurred recently that have led to greater integration of the exchanges. In 1999, the Canadian securities markets embarked on a realignment of responsibilities. The Toronto Stock Exchange assumed the role of the exchange for senior equity issues and the former Alberta and Vancouver exchanges formed the Canadian Venture Exchange and assumed control of junior equities. The Montreal Exchange became the center for derivatives in Canada. In 2001 the TSX purchased the Canadian Venture Exchange (CDNX), which is now a subsidiary of the TSX. The CNDX continues to perform corporate finance functions for the junior capital market and will remain a separate market place. The TSX and the CDNX will launch a new combined web site late this year. New Uniform Integrity Rules, which will bring the rules of these two exchanges closer together, are currently under review by various securities commissions across Canada. Since the TSX is an exchange, going public will place the TSX in the unusual position of trading its own shares. Several steps have already been taken to prepare the TSX for going public. In April 2000, the TSX demutualized and its members were given 20 shares for each seat they owned. Currently, no one can own more than 5% of the TSX but this limit on foreign ownership may change. If it does, critics point out that this would put the TSX at risk of becoming an acquisition target for foreign ownership. The Australian Stock Exchange became a public company in 1998. The Stockholm Stock Exchange, the Deutsche Bourse and the Hong Kong exchange are also publicly listed companies.