Securities regulators in Quebec and Ontario are moving closer to approving a takeover offer for the company that operates the Toronto Stock Exchange by the Maple Group consortium of financial institutions.
The Autorite des marches financiers said it intends to approve the transaction Maple has provided commitments that it believes will maintain the integrity and efficiency of the financial markets as well as the continuity of derivatives operations in Quebec.
"We're satisfied with the results of discussions to date with Maple and with the scope of the undertakings that Maple will be required to provide," said regulator CEO Mario Albert.
He added that the conditions that Maple will be required to accept will ensure the AMF will be able to fully assume its role and responsibilities as a regulator.
Maple welcomed the developments by the AMF and said the Ontario Securities Commission has indicated its staff will develop draft recognition orders with detailed terms and conditions.
The Ontario regulator will publish the draft orders for a 30-day public comment period prior to making a final decision.
Maple spokesman Luc Bertrand said the approvals by regulators "move us closer to fulfilling our vision to create an integrated exchange and clearing group that can deliver significant benefits to Canada and participants in Canada's capital markets."
Maple to ask for deadline extension
Added TMX chief executive Tom Kloet: "This combination will enhance our ability to contribute to the growth of Canada's capital markets at a faster pace and enhance Canada's standing as a financial centre by maximizing our ability to compete and win in the international arena."
Maple said it will seek an extension to the April 30 deadline to complete the transaction.
The Quebec regulator said it took into account comments made during public consultations, including the continuity of derivatives operations in the province.
It said the conditions it intends to impose will adequately address this key issue along with corporate governance, market access, fees and the framework of Maple's operations.
Maple enhanced its initial undertakings by committing to maintain and develop its derivatives trading and related products operations, including over-the-counter derivatives in Montreal.
It will also establish a derivatives committee of the Maple board of directors for advice on all matters related to its derivatives business and develop all enhancements to the SOLA application software in Montreal.
"We believe that this undertaking in principle to maintain and continue to develop Montreal as a hub of attraction for Maple's derivatives trading and related products operations, including over-the-counter derivatives, is vital for a robust derivatives industry in Quebec," he added.
Bid worth $3.8B
Maple continues to commit not to allow any person or company to acquire more than 10 per cent of its voting shares without prior approval of the regulator.
The TMX Group runs the Toronto Stock Exchange and TSX Venture exchange as well as energy trading and other businesses.
The takeover offer values the company at about $3.8 billion.
The deal still requires approval by the Ontario Securities Commission and the Competition Bureau.
Maple Group Acquisition includes 13 Canadian financial institutions and pension funds.