We talk to Lou Eccleston about the exchange’s listings strategy, and he sets out his vison for the future.
Please give us an overview of TMX Group and its operations.
TMX Group is a client-driven solutions provider at the heart of Canada’s capital markets. We manage premier cash and derivatives trading markets, provide global data mining and analytic solutions, and operate clearinghouses for multiple asset classes, including equities, fixed income and energy.
Our core businesses and most prominent brands include Montréal Exchange (MX), Canada’s financial derivatives exchange, Toronto Stock Exchange (TSX), Canada’s senior stock market, and TSX Venture Exchange (TSXV), the world’s most successful junior equities market. Together, TSX and TSXV represent the world’s most prolific public capital formation continuum, and feature a strong and diverse domestic and global client base in regions from Israel to Silicon Valley, and in industries ranging from resources to FinTech.
Over the past few years, the depth of TMX Group’s client services and market solutions offerings has expanded well beyond the point of intersection of buyers and sellers. In fact, every exchange transaction – equities and derivatives – in Canada is settled by one of our clearing entities, the Canadian Depository for Securities Limited (CDS) or Canadian Derivatives Clearing Corporation (CDCC).
Through our information services division, TMX Group also delivers integrated, high-value data sets that fuel proprietary and third party analytics to help clients make better trading and investment decisions.
TMX Group is headquartered in Toronto and operates offices in Canada’s major financial centres as well as in key international markets, including New York, London, Beijing, Singapore and Sydney.
As at the end of November 2016, TMX was number one in the Americas region in terms of number of listings with 3,526. What’s the strategic driver behind this number?
That number represents the total combined listings on our senior market (TSX) and junior market (TSXV) and provides some insight into Canada’s capital market culture. Over the years, Canada’s markets have provided a vibrant breeding ground for small companies - from micro-cap to small and medium-sized enterprises (SMEs) - through each formative stage of evolution.
In order to bring the true TMX issuer profile into focus, it’s also important to highlight the global nature of our franchise. We lead the world in terms of new international listings so far in 2016 and we now have 240 issuers from outside of Canada. And we intend to continue to grow that number as we strategically and aggressively pursue new opportunities around the world.
It’s important to note, however, that our strategy is not merely to accumulate listings, but is focused squarely on providing a platform for listed companies across all sectors to maximise their growth potential.
Together, TSX and TSXV comprise a unique and highly successful capital formation ecosystem that is intrinsic to the Canadian economy. Over the years, this ecosystem has enabled a great number of companies to grow from ambitious start-ups into large national and international businesses. In fact since 2000, well over 600 companies have graduated from the junior to the senior market, with nearly 20% of our benchmark S&P/TSX Composite Index comprised of junior market graduates. This feeder system has also helped to create jobs, attract foreign investment and bring talent to the country.
Looking to the future, what’s your vision for TMX and the exchange industry?
What we can count on is continuous change, increasing competition and the ceaseless proliferation of technology. TMX aims to be at the forefront, leveraging new technologies and new ideas to better serve evolving client needs by:
- Re-imagining and redefining existing markets;
- Launching creative new business models; and
- Delivering innovative data and analytic solutions.
The reality is that technological innovations are serving to redefine every facet of life, including how the world does business, and financial services and the exchange industry are no exception. In TMX’s view, the modern exchange must evolve from a facilitator, or transactional hub, into a nimble, adaptive enabler of success.
Over the last two years, we have taken significant strategic steps to streamline, transform and position our organisation to effectively pursue our new vision for TMX: to be a technology driven solutions provider that puts clients first. Our people are working hard to meet competitive challenges head-on everyday - taking on our clients’ challenges and pursuing solutions that will enable us to successfully fulfil our vision and drive us to future success.
We look ahead with great optimism. TMX has a major opportunity to grow into a powerful global brand, extend the reach of Canada’s world-class markets, and seize the role of a broadly recognised world leader.