Why American Companies Are Listing On The TSX?

Larger numbers of U.S. companies are getting listed on TSX to gain, including many firms whose business is closely related to natural resources. According to Franconia CEO, there is a Canadian appreciation for natural resources that help to get listed on TSX. If the company is doing well in Toronto, the wise investors get to know that it is because the company has passed the group of sophisticated natural-resource market there. Operating primarily in the mining and oil & gas sectors, about half of the 347 international listed companies on TSX and TSXV are based in the U.S. Canada provides access to capital – and a welcoming environment – for many companies located in other countries. U.S. issuers raised $1.2 billion in Equity capital in 2011.

The IPO market in U.S. has become stricter, especially for the Small companies, probably the reason why U.S. small companies are moving to Toronto Stock Exchange. The tremendous infrastructure of Toronto stock exchange which is capable of supporting the growth of Small scale companies is the probable reason of the increasing number of companies listing on TSX. The venture backed technology companies of U.S. like NovaBay are getting listed on TSX and on Canada's micro-cap market, TSX Venture Exchange, to raise funds earlier than they could do in U.S.A.

The Corporate governance of both TSX and TSX Venture Exchange is similar to that of U.S. But the small companies have, some significant exemptions, unlike NASDAQ or NYSE. The newly incorporated company, which would have been otherwise opted for venture capital financing, can list on TSX and raise capital from public. The TSX has over 3,900 companies listed which are more than any stock exchange in North America, including NASDAQ and NYSE. There are more than 340 technology companies and over 140 life science companies on TSX.

Links Used:

http://www.tmx.com/en/listings/sector_profiles/usa.html

http://venturebeat.com/2007/11/05/why-are-us-companies-going-public-in-toronto/

http://hub.aa.com/en/aw/tsx-united-states-canada-toronto-coastal-contacts

About TSX?

Toronto Stock Exchange (TSX, formerly TSE) is the largest stock exchange in Canada, and the third largest in North America. It is the seventh largest stock exchange in the world by capitalization. The Toronto Stock Exchange is owned and operated as a subsidiary of the TMX group for the trading of senior equities.

TSX represents a wide range of businesses from Canada, the United States, Europe and other countries. Additional to these conventional securities, the exchange also list various exchange-traded funds, split share corporations, income trusts and investment.

By listing on Toronto Stock Exchange, an issuer becomes entitled to be included in the S&P/TSX Composite index as well as assigned to S&P/TSX sector. Issuers, who are listed on TSX Venture Exchange, may be eligible to be included in the S&P/TSX Venture Composite Index. Being included in an index raises an issuer's visibility and profile and can improve investor awareness.

The retail investors who get listed on Toronto Stock Exchange can be acknowledged by the Canadian institutional investment community. Portfolio and Pension managers put 70 percent of their money into Canadian assets.

The capability of investors to buy or sell a significant amount of stock, without incurring major price changes, is an important feature of a quality market. This builds trust in the market and encourages more trading. Most of the trading rules are integrated into the automated system, thus ensuring consistent treatment of all orders by Toronto Stock Exchange. This consistency builds the confidence of investors in the fairness of market

The TSX despite its 150 years of history has only recently turned out to be a significant player in North America trading. More than half of the firms listed on TSX are natural-resources business, in industries such as mining, oil and gas, energy, timber, and others that have a major contribution in Canada Economy.

According to Richard Nesbitt, the former head of TSX and CEO of CIBC World market, Toronto stock exchange lists higher risks company than a U.S. market might. But at the same time TSX is wholly regulated market with a very rapid regulatory framework.

Welcome To Princeton Corporate Solutions' Blog on What TSX is?

Hello Readers,

Welcome to Princeton Corporate Solutions's Blog on the TSX.  This blog will:

• Describe what the TSX is?
• Why Americans companies are listing on the TSX?
• What benefits and risks do companies have by listing on the TSX?

If you are interested in more in depth information on this subject please feel free to leave questions, comments, and/or suggestions. This is an interactive blog and we would love to hear from you. 

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Princeton Corporate Solutions