Ontario Securities Commission approves Maple-TMX deal

The proposed acquisition of Canadian exchange operator TMX Group by a consortium of Canadian financial institutions has won approval from Canada’s top securities regulator, potentially clearing the way for approval by the country’s main competition watchdog.

Maple, a consortium of Canada’s largest banks, insurers and pension funds, said the Ontario Securities Commission has approved final recognition orders that will govern operations of the combined entity after the close of the $3.8-billion deal. The rules will be published by the OSC later on Wednesday.

Canada’s Competition Bureau said earlier this year it was working closely with the OSC on its review of the deal. The bureau initially raised concerns about the deal’s impact on competition, but it later indicated the OSC’s final terms and conditions may help to “substantially mitigate” its concerns.

Maple as part of the deal wants to fold under TMX’s wing Alpha Group — TMX’s biggest domestic competitor in stock trading, and the Canadian Depository for Securities, which clears and settles all stock trades in Canada. The fact that TMX and Alpha control some 85 per cent of all stock trades in Canada raised concerns the merger would give too much power to a single market and clearing operator controlled by Canada’s big financial institutions.

TMX and Maple, in a joint statement, said the OSC’s orders approve the proposed acquisition of TMX Group, Alpha and CDS.

The orders, which provide the terms under which the OSC will permit Maple to operate a combined exchange and clearing group, have been reviewed and agreed to by all members of Maple Group.

Update 2:11 p.m.:

Competition Commissioner Melanie Aitken just released the following statement:

"Following an extensive review of Maple Group's bid to acquire TMX Group, as well as Alpha Group and Canadian Depository Services (CDS), in light of the Ontario Securities Commission's (OSC) recognition orders as finalized today, the Competition Bureau does not, at this time, intend to make an application to the Competition Tribunal to challenge the proposed transactions.

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