TMX Group Ltd. (TSX:X) is introducing new risk ratings for U.S. and Canadian securities in an effort to help firms comply with their suitability requirements.
The exchange operator announced the launch of a new data product Wednesday, TMX Security Risk Ratings, which aims to help firms conduct their client suitability assessments by providing a standardized approach to risk assessment. The service will include the most widely held Canadian and U.S. securities, each with a unique identifier and risk rating.
The product is being developed by the Canadian Depository for Securities Ltd. (CDS) and will utilize an independent advisory board to contribute to the rating methodologies. The advisory board will be chaired by industry veteran Barb Amsden. Amsden recently left the Investment Industry Association of Canada (IIAC), where she most recently led its efforts to implement the Client Relationship Model (CRM) reforms.
See: Amsden leaving IIAC
"With the complexity and sheer volume of securities in capital markets, and more demanding regulatory requirements, the difficult role of assessing risk has become an even bigger challenge," said Amsden. "I look forward to working together with my peers in the industry to advise on standards that work to enable firms to better serve investors across the country."
"TMX Security Risk Ratings is designed to help our customers deal confidently and consistently with client suitability assessments, while improving the quality of service they offer to their clients," said Jean Desgagné, president and CEO of CDS. "We are excited at the prospect of bringing industry leaders and subject matter experts together to help us deliver an independent solution with important and wide-reaching benefits to the investment industry."
TMX Group's key subsidiaries include Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha Group, The Canadian Depository for Securities, Montréal Exchange, Canadian Derivatives Clearing Corporation, NGX, BOX Options Exchange, Shorcan, Shorcan Energy Brokers, and Equicom.