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TMX POV

On behalf of TMX Group, I am pleased to present our second annual Environmental, Social and Governance (ESG) report. The purpose of this report is to highlight the progress we have made in our sustainability journey over the past year as we work to integrate ESG objectives into our corporate strategy, business processes and investment decisions.

During 2020, the 50 companies that make up the 2021 Venture 50™ created over 1,500 jobs, growing their workforce on average by over 36% in the midst of a global pandemic. And these companies are projecting a 30% increase in hiring during 2021.

Conditional orders in dark venues and alternative trading systems (ATSs) have been in the U.S. equities markets for several years and continue to grow in market share. They are now becoming more common in Canada and it wouldn’t be surprising to see more conditional order books launched from Canadian exchanges and marketplaces this year.

Earth Day 2021 provides a timely opportunity to reflect on the state of sustainable finance and Environmental, Social, and Corporate Governance (ESG) in Canada. Having been involved in sustainable finance and carbon markets for over 15 years, it’s remarkable to see what’s happened in the past two to three years; as detailed in my previous TMX POV, sustainability has gone from niche to mainstream.

The growth in popularity of exchange-traded funds in Canada has been nothing short of remarkable. Over the past decade, the industry has quadrupled, with asset managers increasingly launching ETF product suites —alongside their larger mutual fund businesses— to service the market’s growing appetite for well-managed, low-cost investment funds.

It was a virtual work call and if it was pre-COVID 19. I'm sure everyone would have seen my eyes roll. My annoyance and somewhat frustration was directed at a colleague who just suggested that it would be timely to buy SPY (the NYSE Arca listed and world’s largest ETF tracking the S&P 500) to capitalize on recent US specific news.

In 2004, an Ottawa-based ecommerce startup launched a website called Snowdevils to sell snowboards. It then quickly became a platform where folks like you and I can create our own websites to sell stuff. Ten years later, the platform had 140,000 active stores, $3.5 billion in sales and became one of Canada’s most innovative companies.

As we come to the end of Women’s History Month, let’s acknowledge some history-making women CEOs in the Canadian and U.S. public markets.

I was honored to host this year’s Ring the Bell for Gender Equality Market Open in recognition of International Women’s Day event as not only an employee of TMX Group Limited (TMX), but also as a representative of the Leadership team at WE Canada, and WE Global.

By listing on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), some of Canada’s most innovative and fastest-growing small and mid-sized companies look to raise capital from retail and institutional investors to finance their growth.

In many ways, 2020 started out quite optimistically for Canadian markets -- according to Statistics Canada unemployment was at a five-year low of 5.6% at the end of 2019 and the S&P/TSX Composite Index* had a very robust 22% return from the previous year. All signs seemed to point to continued momentum into 2020.

What role do public companies have in addressing the issues that impact modern society? That was the question posed to Canadian business leaders at a recent Canadian Chamber of Commerce panel discussion moderated by TMX Group CEO John McKenzie.

The last 10 years have seen mounting challenges for institutional investors. Megatrends such as aging populations and changing social attitudes have created pressure to deliver higher returns and generate value through responsible investing. With more asset classes emerging, there are now even greater opportunities to leverage diversification as a source of value creation.

The Canadian sustainable bond market is growing rapidly with more than C$35 billion already raised by over 19 different organizations. There are three types of sustainable bonds: green (to finance renewables, public transit, energy efficiency, etc.), social (targeting positive social outcomes such as housing and education), and transition (to finance a lower carbon future).

Just as the displayed exchanges and marketplaces in Canada have undergone tremendous change over the past 20 years with the regulatory liberalization that allowed alternative trading systems (ATS) in 2001, the dark market has also gone through significant change since their introduction to the Canadian market a few years later.

We all can only imagine what it is like to be Stefan Thomas. It’s gut wrenching to imagine what he is experiencing. So close but yet so far.

The easiest way to reflect on 2020 is to acknowledge that it is over. So much grief, fear and heartache transpired over the course of last year that we naturally just want to move on and not look back. While that is a fair perspective to take for how much of 2020 played out, on the other hand it’s worth acknowledging some of the major developments in the bustling Canadian and global ETF industry.

On November 25, 2020, John McKenzie, CEO, TMX Group and Peter Conroy, President of Trayport, TMX Group's London-based subsidiary, served as co-moderators for the 11th Annual Canadian Chief Economists Panel Debate, hosted by the Canada-UK Chamber of Commerce.