The Real Reason for TSX and LSE Exchange Mergers

It was the worst of times.  Desititute farmers and unemployed labourers would travel westerly in search of better climates hoping to find work.  Many ended up in Calgary, Alberta but upon arrival would be given a free train ticket from the government…encouraged to keep on going to Vancouver and warmer weather where they and their descendants remain today.

Vancouver became a hotbed of suspicious characters promoting shady stock deals, often these characters had no fixed address – co-incidence?  Most stayed put, although those who were caught and threatened with legal or bodily harm usually moved their ‘business’ dealings to Germany.

In more recent times, these self-described ‘entrepreneurs’ increasingly became the target of regulators.  With a passion resembling religious zeal, regulators began policing all things having to do with securities.  Of course, the purge inflicted upon the securities industry in general did more harm to legitimate investment dealers and managers – since they were remarkably easy to locate (they have fixed addresses) – than the new rules did to crooks.  The crooks simply continued doing what they do, and borderline crooks simply repackaged their offerings (‘hedging’ themselves). 

A final solution was proposed.  If the TSX and and its less mature sibling the TSX Venture Exchange (where most of the Vancouver promoters conducted their business) were to MERGE with the London Stock Exchange, then perhaps the descedants of those destitute wanderers would finally pack up their cellphones and laptop presentations and move to merry ol’ England where the pickings are far more lucrative. 

It’s such a great plan that the New York Stock Exchange, anxious to have the same sort of sheisters move out of Jersey off to Europe, decided it should merge with the Deutsche Boerse.  And even Australia, welcomes the idea of using a ‘merger of exchanges’ as the best way to have less savoury stock promoters emigrate to Singapore.

What is the risk associated with all this?  I fear that if the shadier element in these countries does move away to greener pastures, then the regulators left behind will have no option but to impose even harsher treatment on law abiding investment investment industry practitioners.  One day, there may be demonstrations – mirroring those we witnessed in Egypt – of brokers, financial planners, mutual fund and hedge fund managers parading on Wall Street and Bay Street demanding freedom.

PS – If you lack a sense of humour, I apologize.

Invest to Live, Live to Ride

About Mal Spooner

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He recently authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.
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One Response to The Real Reason for TSX and LSE Exchange Mergers

  1. John Weisgerber says:

    Exchange mergers. It can only be about greed. Otherwise why would the NYSE owners even consider giving up 60% of the new proposed company? Mark Lundeen did agood piece on this a few days ago. I will try to send it to you. The crux seems to be that without flash trading and Derivatives flow the exchanges would not be making any money , the pure purpose of their existence. The retail investor has not reurned to the market there nor here. Too much debt!
    PS . I ride a Road King and it has taken me from Alaska to Accapulco and a thousand stops in between. Nicely broken in with 124,ooo km’s).

    Regards John

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