- Approximately 50% reduction of trading fees for securities valued at
below $1
- Action supports growth in trading volume and liquidity for lower
priced securities
- Overall goal is to grow the market for lower-priced securities,
benefiting all participants
TORONTO, Feb. 1 - 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
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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.
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