TMX Group says its proposed $3-billion (U.S.) merger with the London Stock Exchange Group has been cleared by the Canadian competition commissioner.
TMX, operator of the Toronto Stock Exchange and other Canadian exchanges, said Thursday the competition watchdog, Melanie Aitken, has issued a "no action letter" to confirm she will not challenge the merger.
Restricting competition was not a major regulatory roadblock for the merger, which would create a transatlantic exchange giant.
The bigger regulatory test for the group - which could ultimately quash the deal - is a review by Industry Canada under the Investment Canada Act, which must determine whether the merger would be "of net benefit to Canada."
Ontario's Finance Minister Dwight Duncan, among others, has raised concerns the so-called "merger of equals" with the LSE - which is technically a takeover by the British operator, as the LSE Group would hold a 55-per-cent stake in the new company - might leave Canada's largest exchange in foreign control.
Meanwhile, it is a counter-proposal, made by a consortium of Canadian banks and pension plans, that is raising competition concerns.
The proposal by Maple Group Acquistion Corp. would be dependent on a review by the Competition Bureau, which must rule whether the group can go ahead with plans to acquire the bank-owned alternative stock exchange Alpha Group and the CDS clearinghouse.
Any integration of the operator of the Toronto Stock Exchange and the alternative Alpha trading platform would give the group control of about 80 per cent of stock trading volume in Canada.
Maple Group plans to mail its offer directly to shareholders, while TMX Group and the LSE are holding special meetings June 30 to vote on their merger.