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The Transition to Competitive Pricing on the Toronto Stock Exchange

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  • I. Krinsky
  • W. Rotenberg

Abstract

On April 1, 1983 commission rates on transactions of all sizes became negotiable on the Toronto Stock Exchange (TSE). Under the new competitive pricing arrangement, brokerage firms establish their own rate structures and compete in the marketplace on the basis of price, content and quality of service. This study examines the first two years of transition to negotiated rates. The speed and magnitude of rate reductions, and their distribution across investor categories, indicate the nature and power of the brokerage cartel that is currently being dismantled in Canada.

Suggested Citation

  • I. Krinsky & W. Rotenberg, 1989. "The Transition to Competitive Pricing on the Toronto Stock Exchange," Canadian Public Policy, University of Toronto Press, vol. 15(2), pages 135-144, June.
    • Handle: RePEc:cpp:issued:v:15:y:1989:i:2:p:135-144
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    References listed on IDEAS

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    1. Tinic, Seha M & West, Richard R, 1974. "Marketability of Common Stocks in Canada and the U.S.A.: A Comparison of Agent versus Dealer Dominated Markets," Journal of Finance, American Finance Association, vol. 29(3), pages 729-746, June.
    2. Aharon R. Ofer & Arie Melnick, 1978. "Price Deregulation in the Brokerage Industry: An Empirical Analysis," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 633-641, Autumn.
    3. Thomas W. Epps, 1976. "The Demand for Brokers' Services: The Relation Between Security Trading Volume and Transaction Cost," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 163-194, Spring.
    4. Friend, Irwin & Blume, Marshall E, 1973. "Competitive Commissions on the New York Stock Exchange," Journal of Finance, American Finance Association, vol. 28(4), pages 795-819, September.
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