Proposed transaction between TMX Group and London Stock Exchange Group PLC - Application Filed And AMF Public Consultations Launched


Montréal - The Autorité des marchés financiers ("AMF") today launched consultations pertaining to the announcement made on February 9, 2011 that TMX Group Inc. ("TMX Group") and London Stock Exchange Group PLC ("LSEG") had reached an agreement to combine their respective exchange groups as part of an all-share transaction.

LSEG, TMX Group and Bourse de Montréal Inc. (the "Bourse") today filed an application seeking AMF authorization for various aspects related to the proposed transaction.

To properly assess the impacts, the AMF is seeking comments on all aspects of the proposed transaction and specific issues. The relevant documents and the specific issues submitted as part of the consultation are contained in the public consultation notice posted on the AMF website under Public consultations - exchanges, SROs and clearing houses.

In examining the application, the AMF will in particular have to ensure that the Bourse and the Canadian Derivatives Clearing Corporation ("CDCC") continue to comply with legal requirements and satisfy applicable recognition criteria. Furthermore, in respect of the decisions it makes, the AMF may have to contemplate conditions that will enable it to adequately carry out one of its principal roles as a regulator, namely, overseeing the activities of these entities.

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

  • Ensure that the Bourse satisfies all the requirements enabling it to fully assume its role 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 efficiency;
  • Foster the efficiency, sustainability and growth of the Bourse and CDCC as entities specialized in managing derivatives markets, including regulatory, oversight, clearing and central counterparty activities for trading in derivatives and related products such as fixed income securities;
  • Ensure efficient representation of the derivatives markets of the Bourse and of CDCC clearing and central counterparty services as well as of their participants and service users within all entities of the future Mergeco;
  • Ensure efficient representation of financial industry interests in Québec within all entities of the future Mergeco;
  • Ensure that the Bourse and CDCC will have sufficient financial and human resources to promote their sustainability and continue their growth and development in the derivatives market as well as in the related clearing and central counterparty activities;
  • Ensure sound prudential management of risks related to Bourse and over-the-counter derivatives markets as well as to clearing and central counterparty activities in respect of financial instruments;
  • Foster the creation of capital in Québec, access to the capital markets by Québec-based companies and the participation of investors and other players in the equity and derivatives markets;
  • Ensure the protection of investors.

The AMF invites interested parties to submit their observations in writing with respect to the proposed transaction in accordance with the terms given in the consultation notice, no later than June 29, 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 transaction scheduled for July 14 and 15, 2011. A notice will subsequently be published by the AMF giving details of the hearings.

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

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