The shareholders of the Toronto Stock Exchange gathered for a historic first-ever annual meeting of the for-profit TSE yesterday to hear TSE President and CEO Barbara Stymiest declare 2000, “the best year ever.”

Indeed, it was a very good year for the TSE. Revenue was up 47% over 1999, climbing to $235.5 million while expenses ($107.4 million) were below 1999 levels.

The result was a net income of $80.5 million for the TSE, much of which was redistributed to shareholders in the form of a special dividend of $8,180 per share, paid out earlier this month.

The growth in revenue was largely a function of increases in volume and values traded on the exchange in 2000, a result of booming equity markets in the first half of the year.

In 2000, trading value grew by 79% and volume by 39%. As well, daily transactions increased 86%. From 70, 000 in 1999 to 130 000 in 200). Trading fees increased 46% increase, boosting that revenue stream to $130.9 million from $90 million.

Market data fees were also a strong source of revenue. The growth in online trading helped grow revenues in that area 22% from $28.8 million in 1999 to $35.2 million in 2000.

The TSE also added 116 new listings in 2000, and raised $23 billion in equity capital, a 20% increase over 1999.

But although the sky seemed especially sunny for the TSE, there were some clouds on the horizon. The TSE’s expenses fell from $120.4 million to $107.4 million, but that was mainly due to a reduction in Y2K costs. Without Y2K, operating expenses at the exchange rose by 4%. As well, revenues in 2001 are likely to be reduced as dismal market conditions temper trading action on the exchange.

The outgoing chairman of the TSE, Dan Sullivan, also felt the need to address the concerns of small dealers who had threatened to pressure the TSE board into allowing TSE shares to be traded or sold to raise capital for their own businesses.

The small dealers, who make up the majority of the shareholders, had threatened to push the issue at the meeting, but Sullivan addressed those concerns, by committing to an initial public offering.

“The TSE will be a publicly traded company in due course, and may be the first publicly traded stock exchange in North America within 6 to 12 months,” said Sulllivan.

As well, Sullivan said that interim solutions were being discussed by the board including a TSE buy back of shares via a Dutch auction, or individual approval of share trades.

Vic Rogers, the head of the IDA’s small dealers association, rose to formally thank Sullivan for taking action on the issue, as he said some of the small dealers are desperately in need of fresh capital, presumably a result again of recent dim market conditions.

Also on the agenda for the meeting were a few procedural issues that had to be voted on to facilitate the acquisition of the CDNX, a measure already approved by the board and by CDNX shareholders earlier in the day. The procedural issues passed by a wide margin of well over 90%.