Montreal Exchange

The Montreal Exchange (Bourse de Montréal) or simply MX is a futures and options (derivatives) exchange located in the Canadian city of Montreal. Along with equities, it offers derivative products in currencies, indices, Exchange Trade Funds (ETFs), energy and interest rates. Owned by TMX Group, a Toronto based company, it is housed in the third tallest building in Montreal, the Tour de la Bourse (Stock Exchange Tower) since 1965.

Early History

Trading in futures and options was first introduced to Montreal traders in 1832 when trading took place informally at the Exchange Coffee House. The setting of a formal stock exchange in Montreal was the result of the efforts of Lorn MacDougall, his brothers Hartland St. Clair MacDougall and George Campbell MacDougall along with James Burnett and Frank Bond. Together, they established the Montreal Stock Exchange, as it was known then, in 1872. The name was used until 1982 when it was change to Montreal Exchange.

Lorn MacDougall, voted by the shareholders as the first chairman of the Governing Committee, continued to hold the position till 1883 when he had to retire due to ill health.

In 1910, traded volume on the Montreal Exchange was to the tune of $2.1 million. Comparative figure for the Toronto Stock Exchange (TSX) was only $900,000. The growth, popularity and rising profits of The Montreal Exchange led to the formation of large Canadian corporations such as Montreal Light, Heat and Power and Dominion Textile.

This was also around this time that many financial institutions set up their offices in and around St. James Street. When the New York’s now famous Exchange Building was being constructed by the architect George B. Post in 1903, the Montreal Exchange also commissioned him to design an imposing building on St. Francois-Xavier Street for housing the expanding exchange.

The Canadian economy received a major boost when the country contributed to the war effort during the World War I, which marked the end of the country’s dependence on the London Market. The Montreal market experienced tremendous growth in the 1920s and its volumes reached $3.5 million. The market had grown more than 50% in a decade.

The Montreal Curb Market was established for trading in speculative and small stocks. The idea was that if the market proved successful, it would eventually be merged with the main exchange. In 1953, the name of the Montreal Curb Market was changed to Canadian Stock Exchange.

The Great Depression of 1929 dealt a severe blow to the Montreal Exchange. This, along with many other factors, led to TSX surpassing the Montreal Exchange in terms of traded volumes. Montreal retained its place of pride in the Canadian economy till 1970s. Montreal experienced political troubles due to which, after ten long years, it lost its status of Canada’s economic capital to Toronto.

Major Cause of Decline

Regional aspirations and language became the major cause of decline of the Montreal exchange. Front de libération du Québec, a Marxism Leninism communist organization committed to the Quebec nationalism and creation of an independent state, considered the Montreal Exchange as a symbol of Anglo-Canadian power. They blew up the northwest wall of the exchange building by setting off a bomb on February 13, 1969. Apart from the threat from terrorist organizations, language was major political issue in 1970s. Although the majority of domestic and international business was being carried on in English, Quebec’s provincial government passed the Charter of French Language decreeing that French would be the language of work. The Toronto Stock Exchange offered a convenient alternative as business was being conducted in English language there. The final blow was stuck when many major companies shifted to trade stock on the Toronto Stock Exchange.

Recent History – 1982 Onwards

  • 1982: Montreal Stock Exchange changes its name to Montreal Exchange to indicate the importance of derivative products other than stock-related.
  • 1999: Stock exchange of Alberta, Vancouver, Toronto and Montreal come to an agreement to restructure capital markets in Canada on the basis of specialization. This led to Montreal Exchange becoming the designated Canadian Derivatives Exchange for the next ten years. Shares of large companies were transferred to TSX and those of smaller companies to Canadian Venture Exchange (currently: TSX Venture). The move, although reflective of the economic reality, was a source of concern for Quebec nationalists.
  • 2001: MX completes transition from open outcry system to fully automated trading becoming the first traditional stock exchange in North America to do so. The change also signaled changing over from a specialist market model for trading to a competing market making market.
  • February 2004: The Montreal Exchange becomes the first exchange outside USA to provide and support the Boston Options Exchange (BOX) by taking over the responsibility of day-to-day technical operations using the Sola Trading platform.
  • December 10, 2007: TSX Group announces purchase of Montreal Exchange for C$ 1.31 billion. After formal acquisition on May 1, 2008, the name of the corporation is changed to TMX Group Inc. Later, both corporations are merged to form the TMX Group.
  • February 9, 2011: London Stock Exchange announces merger with TMX Group, which is now the parent company of Montreal Exchange. Xavier Rolet, the current CEO of the LSE Group, is to head the new company and Thomas Kleot, the Chief of TMX is nominated to be the new president. The name of the combined entity is proposed as LTMX Group plc with eight out of 15 board members to be nominated by LSE and the rest by TMX. With a market capitalization of $5.9 trillion (£ 3.7 trillion) the combined entity is slated to become the second largest stock exchange in the world, with a market cap greater by 48% than that of NASDAQ.
  • June 13, 2011: In the hope to block merger with LSE, a group named the Maple Group comprising of leading Canadian financial institutions and banks makes a hostile bid valuing TMX at CAD 3.7 billion.

Canadian Stock Exchange

Originally, formed as Montreal Curb Exchange in 1926 for dealing in junior and speculative stock, the Canadian Stock Exchange (named changed in 1953) was merged as per the original plan, with the Montreal Stock Exchange (as it was known then). Later in 1999, the small-cap portion of the Montreal Exchange, along with the Alberta and Vancouver Stock Exchanges was merged into the Canadian Venture Exchange. The Canadian Dealing Network and Winnipeg Stock Exchange were also merged with the Canadian Venture Exchange, now known as TSX Venture Exchange, a company based in Calgary but with offices in Montreal as well.

Montreal Climate Exchange

Established on July 12, 2006 by a collaboration of the Montreal Exchange and the now defunct Chicago Climate Exchange the Montreal Climate Exchange (MCeX) trades in future contracts on carbon credits. Carbon credits are certificates representing the right to emit a specified amount of carbon dioxide or the mass of other greenhouse gas equivalent to a specified amount of carbon dioxide. The MCeX is Canada’s first regulated climate market.


Carbon credits are part of a national and international attempt to lessen the growth of greenhouse gases. One carbon credit is equivalent of emission of one tone of carbon dioxide or equivalent gases. Government authorities issue credits of regulated emitters at the end of a compliance period. These can be put up for sale by emitters or kept for future compliances. Carbon credits put up for sale can be bought by regulated industrial emitters on the domestic climate exchange with the purpose of complying with the regulations pertaining to emissions of greenhouse gases. MCeX offers futures contracts equal to 100 carbon credits or one metric ton of carbon dioxide or equivalent gases.


  • July 2006: During the first meeting of United Nations Framework Convention on Climate Change, the Montreal Exchange and Chicago Climate Exchange (now defunct) came together to establish the Montreal Climate Exchange in July 2006.
  • October 23, 2006: As the exchange felt that the government was moving the right direction to meet the challenge faced by the environment, it provided a market-based solution in the shape of futures contracts in carbon credits.
  • May 10, 2007: The Montreal Exchange files for approval of rules for trading in carbon credits on the Montreal Climate Exchange.
  • July 25, 2007: The exchange announces that carbon futures contract will be launched by the end of the year.
  • March 4, 2008: The Montreal Climate Exchange announces that is planning to launch futures contracts on Canada carbon dioxide equivalent (Co2e) on May 30, 2008 provided the plan is approved by the regulatory authority.

Market Makers

The MCeX has appointed Orbeo, TD Securities Inc. and TradeLink LLC as its approved market makers for carbon credits.