The Transition to Competitive Pricing on the Toronto Stock Exchange

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.