# Toronto Stock Exchange (TSX): What It Is and How It Works

> **Definition**
>
> The Toronto Stock Exchange (TSX) is Canada's largest stock exchange, with over 1,500 listed companies in various sectors and fully electronic since 1997.

## What Is the Toronto Stock Exchange (TSX)?

The Toronto Stock Exchange (TSX) is a Canadian stock exchange located in Toronto, Ontario. Founded in 1861, the TSX is Canada’s premier stock exchange with more than 1,500 listed companies, including those from the energy, mining, technology, and real estate sectors. The exchange is also home to international listings and exchange-traded products.

It became fully electronic after closing its trading floor in 1997. In 2007, the TSX merged with the [Montreal Exchange (MX)](https://www.investopedia.com/terms/m/montrealexchange.asp) to form the [TMX Group](https://www.investopedia.com/terms/t/tmx-group.asp).

### Key Takeaways

*   The Toronto Stock Exchange is the largest exchange in Canada.
*   The exchange is fully electronic, with more than 1,500 companies listed.
*   All transactions are conducted in Canadian dollars.
*   The TSX is owned by TMX Group, which also owns the Montreal Exchange, the TSX Venture Exchange, and the Canadian Derivates Clearing Corp.

## Understanding the Toronto Stock Exchange (TSX)

The Toronto Stock Exchange is one of the largest stock exchanges in the world and is the third-largest in North America after the [New York Stock Exchange (NYSE)](https://www.investopedia.com/terms/n/nyse.asp) and the [Nasdaq](https://www.investopedia.com/terms/n/nasdaq.asp). The exchange’s history dates back to the mid-1800s. It was established in 1861 and was officially incorporated in 1878 under the name Toronto Stock Exchange or TSE. It became known as the TSX after the company was rebranded in 2002.

The exchange operates Monday to Friday, except for statutory holidays. The market opens with regular trading activity taking place from 9:30 a.m. to 4 p.m. Eastern time. Trading orders may be entered but not executed during the pre-open from 7 a.m. to 9:30 a.m. ET.

As noted above, the exchange eliminated its [trading floor](https://www.investopedia.com/terms/t/trading_floor.asp) in 1997. Trades on the TSX became electronic, similar to the Nasdaq in the United States. Traded instruments include shares in companies, investment trusts, and [exchange-traded products (ETPs)](https://www.investopedia.com/terms/e/exchange-traded-products-etp.asp). Other financial instruments such as [bonds](https://www.investopedia.com/terms/b/bond.asp), commodities, futures, options, and other [derivative](https://www.investopedia.com/terms/d/derivative.asp) products are also actively traded. All transactions are executed in the [Canadian dollar](https://www.investopedia.com/terms/forex/c/cad-canadian-dollar.asp). According to the 2020 Guide to Listing, there were 1,572 listed issuers on the exchange.

The exchange launched the TSE 300 Composite Index in 1977, which was similar to the [S&P 500](https://www.investopedia.com/terms/s/sp500.asp). Composed of the most influential stocks on the exchange, the name of the index was changed to the [S&P/TSX Composite Index](https://www.investopedia.com/terms/s/sp-tsx-composite-index.asp) in 2002. The index is rebalanced on a quarterly basis in March, June, September, and December.

> **Important**
>
> Interested in investing in Canadian companies? Try purchasing American depositary receipts (ADRs), which are available for larger Canadian corporations.

## Special Considerations

In 1999, the TSX became Canada’s only exchange for senior equities. Two years later, it acquired the [TSX Venture Exchange](https://www.investopedia.com/terms/t/tsxventureexchange.asp), which primarily lists [small-cap](https://www.investopedia.com/terms/s/small-cap.asp) stocks.

As noted above, the exchange is now operated by the TMX Group, a result of the [merger](https://www.investopedia.com/terms/m/merger.asp) between the TSX and the MX. In addition to the TSX, the MX, and the TSX Venture Exchange, the group also operates the TSX Alpha Exchange; Shorcan, which specializes in fixed-income products in Canada; and the [Canadian Derivates Clearing Corp. (CDCC)](https://www.investopedia.com/terms/c/canadian-derivatives-clearing-corporation.asp). The CDCC facilitates the clearing of Canadian exchange-traded derivative products and other financial instruments.

The TSX and the [London Stock Exchange (LSE)](https://www.investopedia.com/terms/l/lse.asp) explored the opportunity for a merger. The deal fell through in 2011 after it failed to receive the required two-thirds majority of votes from shareholders. TMX proposed the merger to avoid a takeover by the Maple Group Acquisition Corp., a [consortium of Canadian investors](https://www.investopedia.com/terms/u/unregistered-account-/-nonregistered-account.asp) including the Canadian Plan Investment Board, Scotia Capital, and TD Securities. The TMX Group agreed to the Maple Group takeover, which was completed in 2012.

> **Article Sources**
>
> 1.  TMX. “[Listing with Us](https://www.tsx.com/listings/listing-with-us).”
>     
> 2.  Financial Post. “[Timeline: 160 Years of the Toronto Stock Exchange](https://financialpost.com/investing/timeline-160-years-of-the-toronto-stock-exchange).”
>     
> 3.  Statista. “[Largest Stock Exchange Operators Worldwide as of March 2024, by Market Capitalization of Listed Companies](https://www.statista.com/statistics/270126/largest-stock-exchange-operators-by-market-capitalization-of-listed-companies/).”
>     
> 4.  Strategic CFO. “[Toronto Stock Exchange (TSX)](https://strategiccfo.com/toronto-stock-exchange-tsx/).”
>     
> 5.  TMX. “[Trading Hours](https://www.tsx.com/trading/calendars-and-trading-hours/trading-hours).”
>     
> 6.  TMX, via Internet Archive Wayback Machine. “[Sector and Product Profiles](https://web.archive.org/web/20210222170200/https://www.tsx.com/listings/listing-with-us/sector-and-product-profiles).”
>     
> 7.  TSX. “[Guide to Listing](https://www.tsx.com/ebooks/en/2024-guide-to-listing/).”
>     
> 8.  S&P Dow Jones Indices. “[S&P/TSX Composite Index](https://www.spglobal.com/spdji/en/indices/equity/sp-tsx-composite-index/#overview).”
>     
> 9.  TMX. “[TMX Group Companies](https://www.tmx.com/tmx-group/tmx-group-companies).”
>     
> 10.  TMX. “[About Shorcan](https://www.shorcan.com).”
>      
> 11.  TMX. “[Canadian Derivatives Clearing Corporation](https://www.cdcc.ca/index_en).”
>      
> 12.  The Wall Street Journal. “[TMX, LSE Terminate Merger Deal](https://www.wsj.com/articles/SB10001424052702304450604576415860107784394).”
>      
> 13.  The Globe and Mail. “[Maple Group Wins Control of TMX, with 91 Per Cent of Shares Tendered](https://www.theglobeandmail.com/report-on-business/maple-group-wins-control-of-tmx-with-91-per-cent-of-shares-tendered/article4453456/).”