TMX Group Inc.

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TMX Group Inc.
TMXLogo.jpg
Founded 1861
Headquarters Toronto, Canada
Key People Lou Eccleston, CEO
Products Stock issuance, exchange operation, market data provider
Website www.tmx.com

TMX Group, formerly known as TSX, is a Toronto-based exchange operator of cash and derivative markets for multiple asset classes including equities, fixed income and energy. It owns and operates the Toronto Stock Exchange and TSX Venture Exchange. TSX rebranded following the C$1.3 billion acquisition of the Montreal Exchange in 2008.[1]

Maple Group Acquisition Corporation, a consortium of several of Canada’s largest banks and pension funds, bought a majority stake in TMX for C$3.8bn in August of 2012, defeating an agreed merger with the London Stock Exchange, and renamed the entity TMX Group Limited. As part of the deal Maple bought Canadian Depository for Securities (CDS) for C$167.5m and Alpha for C$175m. [2][3] [4] [5]

TMX Group also serves the Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts and Shorcan Brokers Limited, the country's first fixed-income interdealer broker.

TMX Group ranked 22nd among global derivatives exchanges by volume in 2016, with 201.1 million contracts traded, up from 179.9 million contracts a year earlier, according to Futures Industry Association annual volume figures.

TMX Group owns 53.8 percent of the Boston Options Exchange ("BOX").

History

TMX Group began in 1852 when a group of Toronto businessmen created an association that established the framework for the Toronto Stock Exchange. TSX was formally created in 1861.

On June 11 2008, the company changed its name from TSX Group to TMX Group to reflect its merger with the Montreal Exchange.[6]

Luc Bertrand stepped down from his position as the deputy chief executive officer of TMX Group and president and chief executive officer of Montreal Exchange Inc. in 2009.[7]. He is currently spokesman for Maple Group Acquisition Corporation, which subsequently acquired TMX Group.

In February of 2011, the London Stock Exchange Group PLC (LSE) announced a proposed merger with TMX. TMX shareholders were due to vote on the LSE merger proposal on June 30, 2011 with a two-thirds majority required for approval.[8] [9] However, TMX Group and London Stock Exchange Group terminated the proposed deal on June 29, saying they had determined they wouldn't receive enough shareholder support to complete the transaction.[10]

TMX acquired Atrium Network, a global extranet and wireless services business, in 2011 and rebranded it TMX Atrium.[11] It later sold the business to the Intercontinental Exchange in 2017.[12]

In November of 2012, TMX Group announced it would close down the listings business of its newly-acquired Alpha bourse and cut 100 jobs that year. The announcements came as TMX reported its first earnings as an enlarged company following its purchases of Alpha and CDS. Alpha continues to operate as a marketplace. [13]

On August 12, 2014 TMX announced that Tom Kloet had agreed to remain in the role of CEO until October 31, 2014 (he had previously been scheduled to leave at the end of August) and that the board of directors was actively engaged in the search for TMX Group's next chief executive officer.[14]

In October 2014 TMX Group announced that it would introduce minimum order sizes for brokers and a speed bump on its Alpha Exchange starting in June 2015 in a move to slow down high-frequency traders and simplify the nation’s equity markets. TMX received regulatory approval on August 19, 2015 for a "Long Life order type" on Toronto Stock Exchange (TSX). These orders will have a minimum resting time, and in return they will get priority over other orders at the same price.[15]

In June of 2015 TMX Group embarked on a reorganization initiated CEO by Lou Eccleston as a result of a six-month review of operations. As part of the reorganization, TMX said it was looking to hire a sales chief and that the new executive would focus on commercial strategy and client experience to help fend off competition from rivals, pitch products to investors and attract new stock issues.

TMX also said the head of its Canadian Depository for Securities unit, Jean Desgagne, would add operations, technology, transaction services and procurement to his expanded brief as head of global enterprise services, and the company's head of information technology, Brenda Hoffman, would leave by the end of July.[16] TMX also sold its Equicom Group investor-relations unit to National Public Relations in July 2015 for an undisclosed amount.[17]

Also in June 2015, TMX said it would launch a new platform called AgriClear for U.S. and Canadian ranchers to buy and sell cattle electronically. The initiative is an effort by Eccleston to leverage the exchange operator’s trading and clearing expertise as a way to open up new sources of growth.[18] AgriClear would enable prospective U.S. or Canadian buyers and sellers to use a mobile phone to view video of live cattle, negotiate, transact and arrange delivery. Cattle sales are currently handled through auctions or directly between buyers and sellers. [19]

Contract Volume

Year Total Annual Volume Percent Change
2016 201,119,409 11.8%
2015 179,942,000 6.8%
2014 168,474,076 8.2%
2013 155,753,473 (-)25.6%
2012 209,352,769 3.8%
2011 201,660,687 48.2%
2010 136,051,028 --

2016

Exchange Volume Percent Change
Boston Options Exchange 109,202,724 5.7%
Montreal Exchange 91,916,685 19.9
TMX Group 201,119,409 11.8%

Key People

  • Lou Eccleston is chief executive officer of TMX Group Inc.[20] He was named to that position on November 3, 2014.
  • Brady Fletcher is managing director of TSX Venture Exchange (TSXV), effective October 31, 2016.

References

  1. TSX Venture Exchange Statistics – May 2008. TSX.
  2. Maple and TMX Group Announce Completion of Offer. TMX Group.
  3. Maple extends TMX takeover bid again. Reuters.
  4. Maple Group press release. Canada Newswire.
  5. TMX to close Alpha listings business. The Financial Times.
  6. TSX Group shareholders endorse new name to reflect Montreal Exchange merger. Canadian Business Online.
  7. Press Release. TMX.
  8. LSE offer for TMX receives boost. The Financial Times.
  9. LSE and Canada's TMX Agree Merger. The Financial Times.
  10. TMX, LSE Terminate Merger Deal. WSJ.com.
  11. TMX acquires Atrium Network. Automated Trader.
  12. TMX Group Announces Sale of Atrium. TMX.
  13. TMX to close Alpha listings business. The Financial Times.
  14. TMX Group CEO Thomas Kloet Extends Contract. press release via CNN Money.
  15. TMX to Change Equity Exchange Rules to Slow Speed Traders. Bloomberg.
  16. New TMX CEO shuffles executives, seeks sales administrator. Reuters.
  17. TMX Considers ‘Alternatives’ for Its Slumping Box Options Unit. Traders Magazine.
  18. Canada’s TMX Makes Foray Into Trading Agricultural Commodities. The Wall Street Journal.
  19. Canada stock exchange operator TMX turns to cattle sales. Reuters.
  20. TSX Group Inc. Executive Bio. TSX Group Inc..