TMX deal must preserve Montreal's status: watchdog

Fri Nov 25, 2011 3:30pm EST
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By Leila Lemghalef

MONTREAL (Reuters) - A former Quebec premier wants regulators to seek assurances that Montreal remain the center of Canadian derivatives trading before they approve a proposed C$3.8 billion takeover of the country's largest exchange operator.

Remarks on Friday by Jacques Parizeau, now a director of a Quebec-based watchdog for small investors, highlighted concerns about the deal's impact on the French-speaking province and its largest city, whose status as a financial center has waned with the ascendance of Toronto.

Speaking at public hearings before l'AutoritØ des MarchØs Financiers (AMF), the first of four provincial regulators to look into Maple Group's plan to buy TMX Group, Parizeau said Maple's proposal needs "to be improved so that Montreal remains at the very heart of the trade in derivatives in Canada and in a certain sense with the United States."

Parizeau is a director of the Mouvement d'education et de defense des actionnaires, known as Medac.

TMX operates the Toronto Stock Exchange, the TSX Venture exchange for small-cap companies, and the Montreal Exchange for derivatives, among others. It was formed in 2008 when the Toronto Stock Exchange bought the Montreal one.

The Ontario Securities Commission will hold similar hearings in Toronto next Thursday and Friday. Many of the 13 financial institutions making up Maple are based in Toronto, Ontario's largest city and Canada's financial hub.


Parizeau said regulators should require that CDS clearing house remain a part of MX and he recommended that MX keep the Boston Options Exchange under its wing.   Continued...