CANADA - A proposal to merge Montréal Exchange (MX) and Toronto Stock Exchange (TSX) has been met with calls for a public hearing by pension fund Caisse de dépôt et placement du Québec.
Shortly after the proposal was announced, Caisse said it wanted to ensure the financial and strategic aspects of the proposed transaction were reviewed, as well as the governance rules that would apply.
Henri-Paul Rousseau, president and chief executive officer of Caisse, said its questions needed to be answered before it could decide whether to support the proposal.
He said: "As a shareholder, we want to know whether the proposed merger is ultimately viable, given the emergence of many competitive platforms in the equity markets and the increasing share represented by Canadian companies interlisted on US exchanges.
"This is especially important since the market for standardised derivatives is quite likely to grow significantly in the years to come.
"The institution would like to know what impact these changes will have on the traditional operations carried out by the TSX and the commercial value of these operations in relation to those of the Montréal Exchange."
Rousseau also said the governance principles and rules that would apply to the new entity needed to be clarified.
He said: "What role will Québec's representatives have on the board of directors and the executive committee?
"Where will the decision-making centre be located? It is essential that these questions be answered before we take a definitive stand on the proposal."
Under the terms of the deal, the new entity, to be called TMX Group, would have a board of directors, comprised of 18 members initially, and would be chaired by Wayne Fox, the current chair of TSX Group. It would include five MX designated board members.
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