TSX Group CEO Richard Nesbitt and International Securities Exchange (ISE) President and CEO David Krell today announced the creation of DEX, a new derivatives exchange to be launched by two of the world’s leading marketplaces. DEX, which is scheduled to begin operations in March 2009, will be owned 52% by TSX Group and 48% by ISE and will list and trade options, futures and options on futures on a range of Canadian securities.
DEX will pair TSX’s pre-eminent position as the leading Canadian market for Canadian securities together with ISE’s superior derivatives trading platform, including OMX’s trade match engine and ISE’s complementary suite of technology. With a distinct order book and trading rules, DEX will complement TSX Group’s exchanges to provide investors with a full suite of trading products and strategies.
“We are excited to announce this new exchange with ISE, a company that has shown great innovation and growth in the very competitive US derivatives market,” said Richard Nesbitt, TSX Group’s CEO. “Our commitment to customers is to provide innovative products and services and the best trading solutions. With the launch of DEX, we will be offering both cash and derivatives trading, and providing maximum flexibility, to our customers.”
ISE President and CEO David Krell said, “We believe this unique opportunity will bring additional value to our members and shareholders as well. We have seen tremendous growth in ISE’s derivatives offering across the US, and we see this alliance as a first step in expanding our international footprint. Working with a leading exchange group like TSX Group is clearly a natural fit.”
Between now and the launch in 2009, professionals from both TSX Group and ISE will work on the implementation strategy. Robert Fotheringham, TSX Group’s Vice-President of Trading, and Thomas Ascher, ISE’s Chief Strategy Officer, are leading the initiative. Mr. Nesbitt added, “We have a busy agenda and exciting opportunities ahead of us with the end result being a world-class derivatives exchange for Canada. This is truly an exciting time for our markets and we look forward to the launch of DEX in 2009.”
“We are pleased to be executing on one of our key strategic initiatives to deliver ISE’s derivatives expertise and trading capabilities to the international marketplace. This venture with TSX Group will create a new platform to expand the trading alternatives available for investors in Canadian securities and will clearly benefit the Canadian market,” said Mr. Krell.
The anticipated cost of setting up this new exchange between now and the launch in March 2009 is approximately $25 million (Canadian). The costs will be split between TSX Group and ISE according to the share ownership of the new initiative.
This binding arrangement between TSX Group and ISE is subject to certain usual and customary conditions, including applicable regulatory filings and approvals, and is subject to termination in certain circumstances.
