- Approximately 50% reduction of trading fees for securities valued at
- Action supports growth in trading volume and liquidity for lower
- Overall goal is to grow the market for lower-priced securities,
benefiting all participants
TORONTO, Feb. 1 /CNW/ - TMX Group Inc. today announced comprehensive changes to the equity trading fee structure for securities trading under $1 on TSX Venture Exchange and Toronto Stock Exchange. The changes represent on average an approximately 50% reduction in trading fees for these securities. The new fee structure will take effect on March 1, 2010, subject to regulatory approval.
"We have introduced comprehensive changes to our trading fee structure that will benefit our customers, encourage the continued development of Canada's public venture capital marketplace and enhance TMX Group's competitive position. The changes announced today are intended to encourage higher trading volumes and liquidity, which will benefit traders, investors and listed issuers of lower-priced securities," said Kevan Cowan, Group Head TMX Equities and President TSX Markets. "TMX Group is known throughout the world for operating markets that help smaller-capitalized, early-stage organizations grow. Today's announcement further strengthens our leadership in this space and will ultimately facilitate access to a broader capital pool for highly innovative and growth-oriented organizations."
Over the past decade, the cost of trading on TMX Group equity exchanges has decreased by approximately 90% as trading volume has increased, reducing the cost of raising capital for organizations listed on Toronto Stock Exchange and TSX Venture Exchange. The Company remains committed to appropriate and ongoing investments to further strengthen its equity markets through leading-edge technology, liquidity enhancement programs and other value-creating strategies. TMX Group will continue to monitor market dynamics and make additional trading fee adjustments as appropriate to further these goals.
The new fee structure announced today includes the elimination of the tiered pricing model that saw fees adjusted based on trader volumes and its replacement by a new, lower single fee schedule for securities trading under $1. This will benefit both active and passive traders in organizations of all sizes.
Based on recent historical trading activity, patterns, product and customer mix, changes to the trading fee structure could reduce revenue by approximately $15 to $18 million on an annual basis (or approximately 3% of revenue for the 12 months ended September 30, 2009) if offsetting benefits, including increased volumes, are not realized. However, actual trading revenue will depend on future trading activity, patterns, product and customer mix.
Forward Looking Information
This press release contains "forward looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, estimates and projections as of the date of this press release. Examples of forward looking information in this press release include statements relating to the proposed changes to the equity trading fees structure, and the business, financial position, operations and prospects of TMX Group. Forward looking information, by its nature, requires us to make assumptions and is subject to significant risks and uncertainties which may give rise to the possibility that our expectations or conclusions will not prove to be accurate and that our assumptions may not be correct.
We caution you not to place undue reliance on this forward looking information as a number of factors may cause the actual outcome of events, results, performance or achievements of TMX Group to be materially different from any future outcomes, results, performance or achievements expressed or implied by the forward looking information in this press release.
These factors, many of which are beyond our control, include: market competition; business and economic conditions generally; the level of trading and activity on our markets, and in particular trading in our key products; productivity at TMX Group as well as that of TMX Group's competitors; and the impact on TMX Group and its customers of various regulations. These factors are not exhaustive and other factors could adversely affect future outcomes, results, performance or achievements of TMX Group. Additional information about these and other factors are located in our 2008 Annual Management's Discussion and Analysis (MD&A) and our Q3/09 interim MD&A.
We have no intention to update this forward looking information, except as required by applicable securities law. This forward looking information should not be relied upon as representing our views as of any date subsequent to the date of this press release.
About TMX Group (TSX-X)
TMX Group's key subsidiaries operate cash and derivative markets for multiple asset classes including equities, fixed income and energy. Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange, Natural Gas Exchange, Boston Options Exchange (BOX), Shorcan, Equicom and other TMX Group companies provide trading markets, clearing facilities, data products and other services to the global financial community. TMX Group is headquartered in Toronto with offices in Montreal, Calgary and Vancouver. For more information about TMX Group, visit our website at www.tmx.com.
SOURCE TSX Group Inc.
For further information: For further information: Carolyn Quick, Director, Corporate Communications, TMX Group, (416) 947-4597, firstname.lastname@example.org