The TSX (now part of TMX Group Inc. X – TSX) was allowed to continue to regulate listed companies even after it demutualized and became a listed “for profit” company. There is an inherent conflict between the “for profit” status of the TSX and it acting as a regulator of listed companies. The TSX views listed companies as its “clients” while considering that shareholders of listed companies are lacking in status in dealing with the TSX.
The listed company regulatory function should either operate as a separate entity within the TSX with its own board of directors or responsibility for regulation of listed companies should be transferred to an independent SRO or the securities commissions. In the UK, administration of the listing requirements was transferred from the London Stock Exchange (“LSE”) to the Financial Services Authority (“FSA”). In Hong Kong, the listed company regulatory function of the stock exchange is independent of the business side of HKEx and is overseen by the Listing Committee, a committee of market practitioners jointly selected by the Securities & Futures Commission and the Exchange.
