We recently observed, with some dismay, the fiasco on the Toronto Stock Exchange (TSE) involving the trading of Nortel Networks. Increasingly, there are concerns that this fiasco will reflect poorly on all shares listed on the TSE and, in particular, the mining shares.
As a member of a group of prospectors that meets regularly, I believe that certain corrective actions should be taken to prevent the recurrence of this situation. Our group has decided to study the situation, but, in the meantime, we have some interim recommendations for the TSE:
– The TSE should appoint a “person of authority” to oversee the trading in the shares of each company. This person should be held responsible for any breakdown of technical capabilities or unusual market activity;
– Each order should be split into two parts and executed as two separate orders by two independent brokers. The resulting prices should be averaged. If the averages do not check out within reasonable limits, the transaction should be cancelled and the procedure repeated, until such time as the average of the two transactions is within an acceptable percentage variation limit.
Our group meets each Friday afternoon in Joe’s Saloon after happy hour. We will, from time to time, make further recommendations and we would be pleased to have the participation of any interested parties.
R.E. Encore
Prospector
Mayo, Y.T.
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