From, Susan Crocker, TSE, information for Options Market Participants.
Today listed options trade on the Toronto Stock Exchange (TSE) and listed futures and futures options trade on the Toronto Futures Exchange (TFE). However, trading volumes are very low by international standards.
More generally, there is a concern among market participants that listed equity options and futures in Toronto have failed to realize their full potential. As a result, they have also failed to deliver the benefits that healthy equity derivatives markets have delivered in other countries.
It was against this backdrop that the TSE and TFE Boards of Governors sponsored a Strategic Review of Derivative Markets (the "Review") last year. The terms of reference of the Review encompassed all aspects of listed equity derivatives in Toronto, including governance, financing, trading mechanisms and rules, products, and marketing and education. Following extensive discussions with market participants, and drawing on the findings of research undertaken earlier in the Review, the TSE and TFE published A Blueprint for a Renewed Listed Futures and Options Market in Toronto (the "Blueprint") in January this year.
The release of the Blueprint marks an important milestone. Its purpose is to allow us to generate informed discussion and quality feedback, from the widest possible audience of interested parties, as critical input to the last stage of the Review--the preparation of final recommendations.
Specifically, we have requested that market participants and users with an interest in the future of the listed futures and options markets in Toronto review the proposals contained in the Blueprint and provide comments and recommendations.
It is important to note that, while the Review has been characterized by active consultation with a wide range of market participants and stakeholders, consultation so far has necessarily involved a limited number of representatives from each constituency. And it has tended to address issues in isolation.
Our motive in releasing the Blueprint for consultation is therefore to correct this shortcoming by reaching a wider audience with a document whose comprehensive nature will allow interested parties to weigh the import of specific proposals in the context of the larger program for renewal.
Copies of the Blueprint have been sent to TSE and TFE member firms (including individuals at those firms with a direct interest in futures and options), regulators, and various associations with an interest in Canada's capital markets.
Notwithstanding the many challenges we face, the potential for equity futures and options is substantial, with benefits to TSE and TFE members, investors, and the Canadian capital market as a whole. We therefore invite all parties with an interest in these markets to comment.
All submissions to the consultation will receive an acknowledgment to confirm their receipt by the TSE and TFE. However, we will not prepare individual responses to specific points that might be raised. It is our set of final recommendations--which will reflect the comments and advice of all parties--that will serve as our response to the submissions that we receive.
Should you wish to receive a copy of the Blueprint please send your name and address vial e-mail to my address (scrocker@tse.com) and I will ensure that you receive a copy a soon as possible. I regret that we are unable to make the Blueprint available in electronic form.
Please forward all comments on the Blueprint to:
Stephen Rive
Director, Derivative Markets Development
Toronto Stock Exchange
3rd. Floor
The Exchange Tower
2 First Canadian Place
Toronto, Canada, M5X 1J2
Please note that the deadline for formal submissions is the close of business on Friday, February 7, 1997. However, since final recommendations will not be prepared until the end of February, submissions that arrive after that date will be heard. |
