Maple Application Filed and AMF Public Consultations Launched

Organization Securities

Montréal - The Autorité des marchés financiers ("AMF") today launched public consultations pertaining to the application filed by the Maple Group Acquisition Corporation ("Maple") to acquire 100% of the outstanding common shares issued by TMX Group Inc.("TMX Group").

In its application filed with the AMF, Maple has also proposed that, concurrently or following the acquisition of TMX Group, it will acquire Alpha Trading Systems Limited Partnership and Alpha Trading Systems Inc. as well as The Canadian Depository for Securities Limited and, indirectly, CDS Clearing and Depository Services Inc. (collectively "CDS").

With this application, Maple is seeking AMF approval with respect to various aspects related to the proposed transactions.

The possible impacts resulting from these transactions are significant, particularly with respect to the increased level of concentration of companies engaged in the trading business as well as in derivatives clearing or settlement activities and securities clearing, settlement or depository activities in the Canadian financial industry.

The AMF is seeking comments on all aspects of the proposed transactions and on specific issues. The specific issues are outlined in the public consultation notice posted on the AMF website under Media room - Major issues.

As part of analysis of the application, the AMF must, in particular, ensure that Maple, TMX Group, Montréal Exchange Inc. ("MX"), the Canadian Derivatives Clearing Corporation ("CDCC") and CDS comply with legislation and with the recognition criteria applicable to them respectively. In addition, the AMF may impose conditions in its decisions which it deems advisable to enable it to adequately oversee the Québec financial markets.

In connection with the proposed transactions, the AMF will examine the application in light of the following principles in particular:

  • Ensure that MX satisfies all the requirements enabling it to fully perform its role and meet its obligations as a self-regulatory organization and a derivatives exchange;
  • Ensure the jurisdiction and the exercise of regulatory powers of the AMF with respect to exchange and clearing activities;
  • Foster market integrity, efficiency and effectiveness;
  • Foster the efficiency, continuity and growth of MX and CDCC as entities specialized in derivatives markets;
  • Ensure that the combination of financial market infrastructures as proposed by Maple is compatible with the sound management of risks related to the trading and clearing of securities and derivatives and that it will not increase systemic risk in Canada.
  • Ensure fair and equitable access to all Canadian market infrastructures as well as a competitive offering of financial products and services to all interested individuals, businesses and market participants in Québec;
  • Foster capital formation in Québec, access to the capital markets by Québec-based companies and the participation of investors and other market players in the equity and derivatives and related product markets;
  • Ensure that the combination of financial market infrastructures as proposed by Maple does not unduly reduce competition within markets on the one hand and competition with respect to securities clearing, settlement or depository activities on the other, and that, upon completion, it does not undermine their competitiveness and ability to innovate and enter foreign markets.

The AMF invites interested parties to submit their observations in writing with respect to the proposed transactions in accordance with the terms given in the consultation notice, no later than November 7, 2011. Persons who submitted observations may also, if they wish and depending on availability, present their observations orally at the public hearings on the proposed transactions. These public hearings have not been scheduled yet, but they are expected to take place in late November 2011. A notice will subsequently be published by the AMF giving the dates and details of the hearings.

Maple is a corporation created by investors which include major brokerage firms affiliated with financial institutions and pension funds in Canada.

The Autorité des marchés financiers ("AMF") is the regulatory and oversight body for Québec's financial industry.

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