TSX to begin dual currency trading in 12 companies

The Toronto Stock Exchange plans to let investors trade stock in a dozen TSX-listed companies in either Canadian or U.S. dollars.

"We have done extensive consultation with Canadian and international investors concerning dual currency listings," said TSX Markets president Richard Nesbitt.

"Our research shows that our TSX market structure attributes, including strict price-time priority trading rules, a highly visible order book displaying multiple levels of order liquidity, and rapid, fully electronic (non-intermediated) trade execution, are of significant interest to investors that trade in U.S. dollars."

Many Canadian investors maintain U.S. dollar brokerage accounts. The TSX move to allow dual currency trading is meant to give those investors more flexibility. Investors would not have to trade stocks on U.S. exchanges to get U.S. dollar-denominated securities.

Arbitrage traders – those who buy stock in interlisted issues on one exchange and quickly sell on another to take advantage of price discrepancies – are also likely users of the dual currency system.

Some institutional traders also prefer the electoronic order matching system of the TSX, as opposed to the NYSE, which uses floor traders.

All of the companies that have agreed to take part in the first phase of dual currency trading currently list on both the TSX and an American exchange – either the NYSE, the Nasdaq, or the American Stock Exchange.

The companies are:

  • Alcan
  • Angiotech Pharmaceuticals
  • ATI Technologies
  • Barrick Gold
  • Canadian Natural Resources
  • Inco
  • Methanex Corp.
  • Place Dome
  • Precision Drilling
  • Research in Motion
  • Wheaton River Minerals
On an average day, seven of the companies (Alcan, Angiotech, ATI, Barrick Gold, Inco, Placer Dome, and Research in Motion) currently see more of their shares traded on U.S. exchanges than on the TSX. 

Only four of the 12 report their financial results in Canadian dollars (Angiotech, Canadian Natural Resources, Precision Drilling, and Suncor).

The TSX said it hopes to add dozens of additional companies to its dual currency trading platform by year-end. About 200 TSX-listed companies interlist on a U.S. exchange.

The 12 companies above will be listed and traded in both Canadian and U.S. dollars beginning on Feb. 2, with the U.S. dollar trading symbol being the Canadian symbol with a ".U" extension.

For example, Inco's Canadian share trading symbol would remain "N", while its U.S. dollar trading symbol would be "N.U".