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WFE Interviews Lou Eccleston, CEO, TMX Group

What vision do you have for your exchange and its business?

In June 2015, TMX Group announced an organizational realignment designed to achieve our new vision of being a technology-driven solutions provider that puts clients first. Earlier in the year, we undertook a comprehensive review of TMX from the perspective of our various stakeholder groups, including clients, participants, regulators, shareholders and employees.

The goal was to advance TMX beyond the previous concept of an infrastructure provider made up of a group of companies and into the next phase of our evolution - a cohesive business with multiple, world-leading capabilities and an integrated growth platform. TMX emerged from this process with a sharpened focus, as well as a plan for streamlining our operating structure and the company's investment strategy. In charting a course to future success, we identified five strategic pillars that serve to support TMX's refined vision: capital formation, derivatives, efficient markets, market solutions and market insights. 

How do you see disruptive technologies and innovation transforming your own and global markets in the next few years? 

I definitely think that innovation and disruptive technologies will continue to shape the future of the global markets in general and our company in particular. We're aiming to be innovative and disruptive ourselves. Earlier this year, we announced the launch of eXplore TMX Innovation Lab, a design and development space that will leverage both emerging and in-house technology and intellectual capital to create products and services that will provide competitive advantages to our clients. TMX employees will rotate through to focus on market solutions in both technology and big data analytics. I'll give you another example of what we're doing. In June, we introduced a new business called AgriClear, which is part of our market solutions pillar. AgriClear is a virtual marketplace for trading cattle that leverages our capabilities and expertise across multiple areas – price discovery, delivery, payment and settlement – to solve an identified need in a completely new and transformative way using technology. 

What has been your most successful product of recent years and what do you have in the pipeline?

I have been at TMX for just one year now, and as I have said, my main focus has been on setting our strategy for the future. But I would say that the equities trading team effectively delivered its equity market repositioning program to the market very well. It was announced the week before I joined TMX and involved a suite of initiatives that included closing one market, restructuring another, as well as new products and changes to our pricing model. The whole approach was smart and well executed, and dealt with both client needs and market structure issues very effectively. We're just wrapping up our strategic planning for 2016, and I am confident that there are more innovative products to come. I'm excited about what I'm seeing in our market insight area, especially our data analytics products that will help clients make better trading and investment decisions. 

What specific projects, initiatives or events do you have to address real economy issues? (ie SME finance, securitisation, alternative listing markets) 

SME financing is critically important to the Canadian economy. Our junior equities market, TSX Venture Exchange, is a key part of the financing ecosystem and it has been severely impacted by weakened commodity prices and other factors. While macroeconomic forces remain a stern reality, there are measures we can take to help this market regain its momentum, and we are in the midst of seeking them out and putting them into action. Our work started with meeting with a broad cross-section of clients and stakeholders across the country to identify the key issues of impact and begin to build workable, full-spectrum solutions. We know we need to address barriers to facilitate more capital formation opportunities, improve trading and liquidity, lower expense and administrative burdens on issuers, and create a more attractive venue for emerging digital companies. This initiative will be a key focus area for TMX for the remainder of this year and in 2016. 

Have you had a good experience of international collaboration and how open is your exchange to international investors? 

TMX is definitely open to international investors and our business development teams travel the world to bring investment capital and new companies to Canada. In fact, about half of our order flow on Toronto Stock Exchange and Montreal Exchange come from outside of Canada. In terms of collaboration, our energy exchange, NGX, has a long-standing agreement with the Intercontinental Exchange whereby NGX uses ICE's front-end trading technology and provides clearing services for ICE's US physical gas products. Another interesting initiative here that also highlights the global nature of our business is with Santiago Stock Exchange. With them we launched SSEV, a new public venture capital market for small and early-stage companies in one of Latin America's largest economies.

Do you think that currently markets are appropriately and effectively regulated? 

Regulation of markets is extremely important. Investors must feel confident that regulatory infrastructure is robust before they feel comfortable putting their money into the market. While every country clearly has its unique aspects, the world is small and interconnected so collaboration among jurisdictions is critical. Everyone wins when regulation can be harmonized as much as possible. TMX itself is highly regulated, but we accept that our public interest mandate makes this necessary and we have productive relationships with our regulators. I have found that Canadian regulators lead the world in many respects – our markets have avoided some of the troubling issues that other countries face. 

What do you do to de-stress – do you have a favourite holiday destination or a serious pastime to help you unwind? 

I love to cook because it's creative and relaxing. I particularly like to cook for my family. Sitting down to enjoy a meal together keeps us close.

FOCUS November 2015 Issue
World Exchanges Launch Global Financial Education ...