What is the TMX Group
The TMX Group is a large Toronto-based financial services company which operates Canadian exchanges, who deal in a wide range of asset classes. The group operates exchanges for derivatives, equity, and fixed income trades through trading, clearing, depository, and settlement services.
BREAKING DOWN TMX Group
TMX Group has its origins in the Toronto Stock Exchange (TSX), founded in 1861 and initially listing only 18 stocks. Traditionally, trading in Canadian equities has taken place on a provincial, or regional, level. By the end of the 1990s, TSX had become the national exchange for senior equities. Its counterpart in Quebec, the Montreal Exchange (MX), handled trading in derivatives. Other provincial exchanges in Vancouver, Calgary, and Winnipeg merged to form the Canadian Venture Exchange (CDNX), which handled junior equities.
TSX registered as a for-profit enterprise in 1999, making it eligible to be a publicly traded stock. The Toronto Exchange soon found itself in the odd position being an exchange executing trades in shares of the business, as well as being the regulatory authority for the trading of those shares. In the United States, authority powers would have fallen into the realm of the federal level.
In response to this juxtaposition, TSX handed regulation off to Market Regulation Services Inc. and the Investment Dealers Association. In the early 2000s, TSX assumed ownership of the Canadian Venture Exchange (CDNX) and renamed it the TSX Venture Exchange.
TSX officially changed its name to the TMX Group in June 2008. In early 2011, TMX hatched plans to merge with the London Stock Exchange (LSE). A rival bid appeared in the Summer of 2011, as a group of Canadian investors known as the Maple Group challenged the TMX/LSE deal. This group of investors would complete its takeover of TMX in July of 2012.
Maple Group Ownership Changes the TMX
In recent years, TMX has diversified its holdings and offered services outside of the traditional functions of a stock exchange.
- Shorcan is a fixed-income subsidiary which provides a specialized fixed-income trading platform and has recently announced plans to support trading of cryptocurrencies.
- TMX Datalinx compiles historical and real-time data from a wide range of exchanges and markets this information to investors.
- TMX Insights offers a package of analytics and content and database management services to financial institutions.
In October 2017, TMX acquired Trayport, a London-based energy-trading platform, from the Intercontinental Exchange (ICE) after British regulators forced ICE to divest itself of the company. The acquisition allowed TMX to access global utility, energy, and derivatives markets and satisfied the British government’s interests in a diversified marketplace for trading software.