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Canada produces a model financial market

TMX is a great success story in global finance today. Listening to their presentation this week and discussing the woes of today’s financial markets within the broader global economic picture it was really encouraging to hear how a modern stock exchange is able to buck the trend and be profitable and growing. Makes you wonder how this has been achieved whilst others around the world flounder? It’s not really complicated or special in reality. They have invested in some terrific technology, have produced a robust regulatory structure, allied their business to the needs of the political objectives and work closely with central banks to provide a stable market, attracting many new listings and capital raising environments. The result is financial stability and sustainable economic growth (although modest, but growth none the less) attracting foreign investors. No miracle or special ingredients, just doing very well what all Exchanges and financial markets should be doing, or more to the point, were once doing

Typical Canadian conservatism attracts them to use the phrase “A safe haven” and this is massively understating and misrepresenting what they are achieving. In fact the model created at TMX is one that all Stock Exchanges should follow; notably without political interference, creating artificial markets that do not meet the traditional needs of entrepreneurs and investors.

TMX also make massive play of the trading capability within their systems and low latency structures that match anything in the Exchange world today, but they have been hugely successful in attracting an impressive number of listings that would be the envy of virtually all exchanges

At a time when the need in global society is economic growth it is the capability of the capital markets and the liquidity within the financial system that is important. None less though is the alliance of regulatory and political support to create the environment for Stock Exchanges to work effectively. So no rocket science, just sensible use of markets that stick to the traditional values of capital raising and make use of the technology and benefits of a shrinking global market.

‘Safe haven’, not in my book, just terrific use of resources and people using their expertise to produce a financial benchmark that the world would do well to follow!

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