Source: The Canadian Press

Tougher competition is not eroding the Toronto Stock Exchange’s share of the trading market, which is more likely to level off than decline as its rivals push into the arena, the chief executive of the TMX Group Inc. (TSX:X) said Friday.

“We do have a clear objective to fight for every percentage of market share that we can,” Thomas Kloet told a conference for traders in New York.

The TMX Group owns the TSX, which is Canada’s best-known and biggest securities market, as well as the TSX Venture Exchange for smaller-cap companies and the Montreal Exchange derivatives market.

It has been challenged in recent years by a number of new competitors, including the Alpha trading system for large-volume issues, the Canadian National Stock Exchange and other alternative trading systems.

Alpha Group, a trading system launched by a group that includes the brokerage arms of Canada’s six biggest banks, has maintained lower trading fees in its attempt to grab market share.



The Toronto-based TMX remains Canada’s dominant securities market operator, and Kloet said Friday that the company has been performing well and predicted its equity trading market share will level off, rather than fall, in the foreseeable future.

“Notwithstanding the competition in the Canadian marketplace, our volumes have risen not fallen,” he said.

“I’m encouraged by the fact that you’ll see in the month of March an actual blip up in terms of market share… something that not a lot of stock exchanges are experiencing,” he added.

To remain competitive, the TMX Group slashed securities trading fees earlier this year for both the TSX and the TSX Venture Exchange. It also introduced a program to reward companies that trade high volumes.

Kloet said that its market data services division has seen its subscriptions level off after taking a hit during the economic downturn.

“There was a period where, in particular, our U.S. subscription levels were going down as Wall Street employment changed,” he said.

“Our view is that (it) has more or less stabilized and we’ve seen the number of subscribers remain reasonably steady over the short run.”

In April, the company said profits for the first quarter rose 14% to $49.1 million, and revenue was $139.7 million.

TMX Group employs 845 people across its organization and operates the Toronto Stock Exchange as well as several other markets including the TSX Venture Exchange, the Montreal Exchange, the Natural Gas Exchange and the Boston Options Exchange.

Its principal activities are to provide electronic, screen-based equity securities market information.

Shares of TMX Group were down 17 cents at $27.32 on Friday afternoon.