THE TORONTO STOCK EXCHANGETHE TORONTO STOCK EXCHANGE

A summary

TSE triviaTSE trivia

Incorporated in 1878

Largest computer-only exchange in North America

Monthly trading: over $100 billion

Lower costs of going public than NYSE and NASDAQ

Listing Requirements:

Profitable Companies• Net tangible assets of $2,000,000• Net earnings from on-going operations of at least $200,000• Pre-tax cash flow of $500,000 • Sufficient working capital and appropriate capital structure

Companies forecasting profitability• Net tangible assets of $7,500,000• Sufficient support of the company’s forecast of the earnings • Evidence of pre-tax cash flow for the current or next year of at least $500,000

• Adequate working capital and appropriate capital structure to carry on the business

Public Distribution Requirements• At least 100,000 freely traded shares having a market value of $4,000,000

Other requirements

DemutualizationDemutualization

Before: Members owned the TSE

Now: TSE inc. is a public company owned by shareholders (former members) and governed by a board of directors

CATSCATS

The world’s first Computer Assisted Trading System

Requirements:• Users must be approved traders

• All trades are executed through terminals located on the floor or in a traders office

• Orders are received by registered representatives and then transmitted to the trader

Orders: CATSOrders: CATS

Limit order • Enter a queue according to price and time specifications• If there is a match between a buy order price and a sell order price, the the order

is filled

Hit-the-market order• CATS automatically assigns a price equal to the opposite side of the market

TOREXTOREX

Updated version of CATS

Benefits of Fully Electronic TradingBenefits of Fully Electronic Trading

• Access to a wide range of markets• View news and corporate development• See the size and depth of the market• Access to all Canadian Exchanges• Greater efficiency