Through
the targeting of ETF listings, CNSX is taking most direct aim at the Toronto
Stock Exchange.

The
Canadian Trading and Quotation System, or CNQ, has rebranded itself the
Canadian National Stock Exchange (CNSX), and plans to become more competitive
in attracting Canadian listings, including exchange-traded funds.

The
exchange will soon introduce specific rules for the listings of ETFs , moving
beyond its current equity and debt listings. CNSX also plans to list other
types of funds and structured products. CNSX was primarily a regulatory body
that was first approved as a stock exchange in 2004, and has attracted a total
of 100 listings since its launch.

Through
the targeting of ETF listings, CNSX is taking most direct aim at the Toronto
Stock Exchange (TSX), which brands itself as the world’s first-ever ETF lister
(it had an ETF listed in 1990). TSX now has 64 ETFs listed, including
portfolios from among the major  ETF
players in the U.S., Barclays Global Investors’ iShares family and Claymore
Securities. It also lists a large group of ETFs from the Canadian-only Horizons
Beta Pro ETF family.

TSX’
64 ETF listings represent the majority of Canada’s total of 73 primary ETF
listings, at the end of the third quarter, according to data from Barclays
Global Investors’ Research & Implementation Strategy Team.

The
Toronto Stock Exchange has been under fire from analysts of late for
less-than-stellar growth, and has been overhauling its business model. TSX
recently announced lower trading fees on ETFs, among other changes (see story
here.) 

CNSX
has issued a new trading fee schedule, based on a per share mode, joining the
price war with other stock exchanges in Canada. In particular, CNSX’s
designated market makers, an essential partner to ETFs, now receive trading fee
credits for providing liquidity in designated stocks.

The
exchange has made technology changes as part of the new push, hooking up with
Pure Trading, its alternative exchange sister company. Pure Trading handles
5-10% of daily volumes in active Canadian stocks. CNSX is the primary
representative for U.S. brokerage houses trading in Canada. CNSX will use the
same X-Stream platform as Pure Trading, a move it hopes will bring more
listings and trading volume. Pure Trading is Canada’s most active alternative
trading market.

CNSX
has also made a few key senior hires to spearhead listings growth. William
Woods joined as a managing director  in
charge of implementation of new products and listing policies. CNSX has also
added a listing manager, a new position, filled by Richard Smith.

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