TSX Group CEO Says Global Consolidation Is Forcing All Exchanges To Re-Think Their Futures

TSX Group CEO Richard Nesbitt told a business audience at Cercle de la finance internationale de Montreal today that TSX Group is addressing new opportunities and challenges in this era of global exchange consolidation by quickly implementing competitive responses on a number of fronts – on technology, on fees, and on having the right mix of products to meet customers’ needs.

Mr. Nesbitt said, “Everywhere, cash and derivatives markets are being brought together, creating combinations that are greater than either cash or derivatives could be alone, and building new possibilities to exploit existing strengths.” He adds that TSX Group will be involved in derivatives after the agreement with the Montreal Exchange expires in 2009, “We would leverage the recognition that Montreal has already developed as a leading derivatives centre for North America, not just Canada. And our strong preference is that Montreal permanently remain the centre of excellence for derivative expertise in Canada.”

With the recent round of consolidation, global exchanges are moving towards the combination of cash and derivative markets. NYSE’s purchase of Arca brought with it the options business of the Pacific Exchange. The NYSE offer to Euronext would bring with it to NYSE the European derivatives platform LIFFE.

In Australia, the ASX and Sydney Futures Exchange are merging. Mr. Nesbitt added, "I believe that we have until the end of this year to settle on our response to what is happening. The decisions that face us in the coming months as to how we add derivatives to our mix are every bit as profound as those we faced in 1999. The difference is that in 1999 our challenge was to escape from our weaknesses. This time, we have the opportunity to build on our strengths."

Mr. Nesbitt’s remarks at Cercle de la finance May 25, 2006.

About TSX Group Inc. (TSX-X)
TSX Group operates Canada's two national stock exchanges, Toronto Stock Exchange serving the senior equity market and TSX Venture Exchange serving the public venture equity market as well as Natural Gas Exchange (NGX), a leading North American exchange for the trading and clearing of natural gas and electricity contracts. TSX are the initials attached to the core equity operations of TSX Group (www.tsx.com): Toronto Stock Exchange, TSX Venture Exchange, TSX Markets, TSX Datalinx, TSX Technologies. TSX Group is headquartered in Toronto and maintains offices in Montreal, Winnipeg, Calgary and Vancouver.