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November 11, 2011 1:44 am
Several players in Canada’s financial services industry have spoken out against elements of a C$3.8bn ($3.7bn) bid by Maple, a consortium of banks and pension funds, for TMX Group, operator of the Toronto and Montreal exchanges.
In comments to the Ontario Securities Commission, Chi-X, which operates an alternative trading platform, said that if the deal goes through, “competition for clearing services in Canada will be unlikely going forward … Given that there is not a regulatory obligation for participants to use a cheaper or more efficient clearing solution, a new entrant will be unable to compete even if a superior product is offered”.
Other critical comments came from, among others, a group of 18 independent brokerage firms, and investor protection groups.
The comments were made ahead of a planned OSC hearing on the Maple bid. The deal also faces scrutiny by the federal Competition Bureau.
Maple has made some adjustments to its proposal to accommodate concerns about conflicts of interest and concentration of power.
Even so, the Canadian Foundation for Advancement of Investment Rights urged that an independent watchdog should regulate the Toronto stock exchange’s listings business.
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