TMX Outlook for 2024

By: John McKenzie, Chief Executive Officer, TMX Group Jan 2024

What changed in your business over the last year and what was your biggest achievement? 

 At TMX, our focus is always on providing excellent service to our growing client base and stakeholders across our ecosystem, to ensure our markets remain strong and resilient. While operating conditions presented significant challenges for the global financial industry and exchanges around the world in 2023, these challenges presented important opportunities as well. TMX seized the opportunities during the year to accelerate our long-term growth strategy to diversify, globalize, and innovate across the business.

Notably, 2023 was a landmark year for our Global Solutions, Insights and Analytics (GSIA) segment, marked by high performance and a significant acquisition: in mid-December, we announced an agreement to acquire the remaining interest in VettaFi, a leading indexing and analytics business we had made an initial investment in earlier in the year.

Our GSIA business also celebrated some big milestones. Trayport, whose Joule network plays a key role in serving world power and natural gas markets, celebrated its 30th anniversary in September. And in October, we celebrated 25 years of our partnership with S&P Dow Jones Indices – since 1998, the S&P/TSX Index Series has served as the measure of value and performance for multiple segments of Canada’s stock market, and we look forward to continuing that leadership.

We also made important steps forward this year in our work on furthering Indigenous economic reconciliation, an initiative important to TMX and to me personally. Since 2021, we have worked to transform how our organization, and the Canadian capital markets ecosystem more broadly, engages with Indigenous communities. This fall we hosted our first Indigenous Investor Day, dedicated to building connections between Indigenous entrepreneurs and businesses and investors, and we’re looking forward to building on this momentum in the year ahead.

What is your most important project this year (regulatory or otherwise)?

Our agreement to acquire VettaFi is a very important move for us, in terms of advancing our strategy and achieving financial objectives, but what we are most excited about is what it means for our clients: increasing the depth and value of data-driven insights we provide, expanding our digital capabilities, and enriching our industry-leading support for ETF issuers.

The addition of VettaFi fits squarely with TMX’s purpose to make markets better and empower bold ideas. In 2023, we undertook several other important initiatives across our business to serve clients better now and into the future.

Together with our partners at CanDeal, TMX Datalinx launched Term CORRA, a new risk-free, transaction-based commercial interest rate. Based on the CORRA futures being traded on Montreal Exchange, Term CORRA is now the industry standard in Canada.

We also launched the TMX ESG Data Hub, in partnership with leading global ESG data and analytics providers. The new hub integrates ESG data measures for our clients and investors to support their investment decision-making process.

Our post-trade businesses, CDS and CDCC, launched the Canadian Collateral Management Service (CCMS), a customized mobility and liquidity solution for Canada's secured finance industry.

In December, TSX Venture Exchange launched the TSXV passport listing process, an innovative new approach designed to create faster pathways for early-stage companies to go public, raise capital, and achieve liquidity — while upholding TSXV’s listing standards.

And the TMX markets team launched Alpha-X and Alpha DRK, two new order types designed to enable all participants, including institutional clients, to optimize trading strategies and improve execution quality in fast-moving, modern markets.

Each of these projects helps better serve our current and prospective clients from across the spectrum of market participants – from early-stage venture issuers, to major institutional investors.

What are you most excited for in 2024?

I’m looking forward to building on the successes of 2023 to better serve our clients and the ecosystem in 2024. Along with the continued execution of our global growth strategy, a key role we play on an ongoing basis is as a persistent advocate for capital markets and the important role they play in our economy and our society. As the owner-operator of Canada’s major exchanges and key capital markets infrastructure, TMX has a responsibility to live our corporate purpose to make markets better and empower bold ideas. We are committed to advocating for informed policies and regulations that support fairness, efficiency, inclusion and growth for all market participants, to the benefit of all Canadians.

A healthy society needs economic growth – to create jobs, generate tax revenue – and ultimately secure the future of everyone who lives in it. TMX is a passionate advocate for building Canada into a world-leading environment for businesses to succeed, with a fair and competitive business tax environment, globally-competitive incentives for entrepreneurs, and regulatory certainty and predictability.

What are your biggest opportunities?

I’m excited about the VettaFi acquisition and the opportunities that it opens up for us. We have a long history of leadership in the ETF and indexing space; in fact, Toronto Stock Exchange invented the first exchange-traded, index-linked product – the prototype to the ETF – in 1990. And as the industry has evolved over the past thirty-plus years, we’ve remained at the forefront of innovation, including working with our partners to launch the first fixed income ETF and the world’s first Bitcoin ETF. Today, we have almost 1,000 ETFs listed on Toronto Stock Exchange, including 114 new ETFs joining the market this year. The addition of VettaFi brings a dynamic new component to our GSIA business. Benchmarks and indices are a core information requirement for our increasingly global client base, and I’m excited about the opportunity to expand upon our capabilities in this space.

We have a number of other exciting initiatives underway across our multifaceted enterprise designed to expand our global presence and client base. TMX’s equities trading team is focused on specific initiatives to apply our adaptive and innovative solutions to address competitive client challenges across the U.S. equities ecosystem. Trayport is also targeting emerging opportunities to apply their proven expertise in serving the world’s rapidly evolving energy markets, providing network and data connectivity and supporting growth in demand for quantitative and automated approaches.

What do you see as the key themes and trends for your exchange and market infrastructure in 2024?

Exchanges around the world are having conversations about sustainability and our role in enabling a more sustainable future. Recently, Toronto Stock Exchange participated in the WFE’s first Ring the Bell For Climate campaign, in which we joined 30 other exchanges from around the world in recognition of their role in supporting climate action, channeling capital toward sustainable pursuits, and supporting issuers through the transformation of the economy.

I anticipate that will continue to be an important theme, as we work with regulators to establish a global baseline for climate and sustainability-related disclosure standards that provide the investment community with consistent, robust and above all else, useful information for investment decision-making.

Canada’s public capital markets are unique, in that two-thirds of our public companies are small and medium-sized enterprises – companies that would be private in other countries. Our two-tiered marketplace enables companies to access public capital at an early stage, and later graduate to a senior exchange; in fact, a third of the issuers on TSX are graduates from TSX Venture Exchange.

Another important theme for next year will be continuing to advocate for growth-friendly policies for all companies, including the public venture companies that are such an important part of our ecosystem.


The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.