Skip to main content

Tom Kloet, C.E.O of the TMX.

Chris Young/THE CANADIAN PRESS

Back when TMX Group Inc. was looking at merging with LSE Group, TMX chief executive officer Tom Kloet would get pretty excited any time the opportunity to combine his business with the index business of LSE would come up.

The LSE's well-known FTSE indexes would provide entrée into many other markets.

The TMX-LSE combination is long dead, with TMX having instead merged with rival Maple Group, but the logic of the index combination endured. When TMX and LSE announced Tuesday that they were doing a deal to combine their fixed income index businesses, it was a legacy of those earlier talks.

Story continues below advertisement

TMX has developed a bond index business that gathers prices from 11 different bond dealers, filters the pricing for outliers, and feeds various bond index products. But it had reached a "now what?' moment.

"It has been one of our higher growth business lines," said Eric Sinclair, who heads the TMX's data division. "The issue for us was how do we get to the next level and how do we go global." FTSE, the index business of LSE, provides that global reach and brand. There's also an index research group hunting for new products.

"We're excited about working with the research group at FTSE, and combining our know-how with their know-how," he said.

For FTSE, TMX's fixed income business comes with a model that involves getting prices from multiple bond dealers. That's something that may be able to win business when applied in countries where the current bond indexes are mainly run by investment banks, and have limited pricing inputs.

"We will be opening an office in Toronto, expanding our North American footprint," said Jonathan Horton, President FTSE North America. Then FTSE will "look at how we take that model and build it out into other markets."

"I think it has the opportunity to become an established global model," he added.

(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)

Story continues below advertisement

Return to Streetwise home page.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.