Kloet seeks to allay merger fears

By Steven Lamb | March 2, 2011 | Last updated on March 2, 2011
2 min read

The head of the Toronto Stock Exchange has responded to criticism of his plan to merge the TMX Group with the London Stock Exchange Group, saying the deal will “deliver clear and significant benefits to Ontario.”

Chief executive Tom Kloet appeared before the provincial legislature’s select committee, along with Xavier Rolet, CEO of the London exchange.

“The merger strengthens our company’s future competitiveness and contributes to the growth and competitiveness of the financial sector in which we operate. It does so without in any way diminishing local regulatory authority,” Kloet said. “In our opinion, it opens a world of opportunity for Canadian public companies of all sizes and for the advisory and business community that supports them.”

He said the TSX and TSX Venture Exchange were both strong brands within Canada and that the company would not want to jeopardize the cache that being listed on the exchanges carries for issuers.

Kloet addressed the misunderstanding that the deal was a merger of the markets themselves, saying it was simply a merger of the holding companies.

“Toronto Stock Exchange will continue as a separately governed and Canadian-regulated exchange,” he told the committee. “We have guaranteed this through careful provisions in our merger agreement and the undertakings we will be making to our securities commissions and governmental regulators.

“By combining the companies that own and support the exchanges, we help to make each more powerful and able to compete around the world.”

The Ontario Securities Commission would, he said, remain the lead regulator over the Toronto operation.

Steven Lamb