GMP gets best of both worlds with Maple Group exit

GMP Capital Inc. is getting the best of both worlds when it comes to being part of Maple Group, the consortium that wants to take over the TMX Group Inc.

GMP gets a seat on the board of the exchange company, should Maple get past the regulatory hurdles still standing in its way, but without having to write a cheque at a time when spare cash is scarce.

Maple on Wednesday gave an update on where the planned transaction stands. Most of the information was expected. The publication of final regulations from the Ontario Securities Commission is on track. The parties are still waiting on decisions from the Alberta and British Columbia Securities Commissions, and the federal Competition Bureau. It's the last of these that really has everybody in suspense.

In the meantime, however, GMP has decided to drop out, but will keep a board seat.

It's an elegant solution to some vexing issues inside Maple. Regulators are demanding that no more than half of the board come from Maple. So by withdrawing, GMP can help the group meet that demand while still keeping an ally on the board in the seat that's supposed to represent the "independent investment dealer community."

At the same time, GMP, like all small brokerages, has been struggling to make money in brutal markets. Having to write a cheque for an equity investment in Maple now would be inopportune timing, especially if there are expensive commitments to the Competition Bureau that require more cash outlay. (One thing the bureau had been seeking, for example, is enhanced compliance systems that could be costly to build.) GMP's small portion of Maple will be picked up by other members of the group, which now has 12 members.

So GMP saves the cash, and keeps the influence and inside view into Maple that drew it into the consortium in the first place.