TMX Group reduces equity trading fees

TMX Group reduces equity trading fees

19/03/10

  • Reduction in trading fees for securities valued at $1 and higher
  • Changes to benefit active and passive traders in organizations of all sizes
  • Supports growth in trading volume and liquidity

TMX Group Inc. today announced a reduction in trading fees for securities trading at $1 and higher on Toronto Stock Exchange and TSX Venture Exchange, Canada's central, neutral equity marketplaces.

"Today's changes will deliver significant benefits to all market participants and further enhance our competitive position. We offer the most value in the market through the combination of a lower and simpler fee structure and superior liquidity," said Kevan Cowan, Group Head TMX Equities and President TSX Markets. "These measures are intended to encourage higher volume and liquidity levels, reduce the cost of raising capital for listed issuers and strengthen the Canadian capital markets overall."

The changes announced today take effect on April 1, 2010, subject to regulatory approval. They represent an overall fee reduction that will benefit both active and passive traders in organizations of all sizes and will decrease the average fee spread. In addition, the current three-tier fee structure will be replaced by a simpler two-tier structure. Under the new model, the fee per share on active trades for the lower tier (less than 250 million shares per month) will be reduced to $0.0035 and the passive trade rebate will be $0.0031. For the higher tier (250 million shares per month and higher), the fee on active trades will be $0.0034 per share and the passive trade rebate will be $0.0031 per share. In addition, TMX Group today introduced a separate program to reward qualifying high-volume participating organizations.

These actions, combined with the February 1, 2010 announcement of reduced trading fees for securities valued at under $1 (which took effect March 1, 2010), underscore TMX Group's commitment to operate Canada's premier central equities markets - Toronto Stock Exchange and TSX Venture Exchange - for the benefit of all market participants.

The cost of trading on TMX Group equity exchanges has decreased consistently over the past decade. In parallel, trading volume has increased, reducing the cost of raising capital for organizations.

Based on recent historical trading activity, patterns, product and customer mix, reductions to the trading fees for securities valued at $1 and higher could reduce revenue by approximately $11 to $15 million on an annual basis (or approximately 2.0% to 2.7% of revenue for the 12 months ended December 31, 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

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 2009 Annual Management's Discussion and Analysis.

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.