Enhancing Market Transparency

TMX Group (TMX) has been advocating on behalf of Toronto Stock Exchange (TSX) and Venture Exchange (TSXV) listed issuers for meaningful improvements to trading rules and policies set by the Canadian Investment Regulatory Organization (CIRO) and other industry regulators. Our goal is to promote fairness, transparency, and investor confidence in the Canadian capital markets, on your behalf, to create an environment where issuers can thrive and succeed.

Below is an update on our ongoing efforts to improve trading visibility for TSX and TSXV-listed issuers by providing Canadian Consolidated Volumes to market participants. We are also providing an update on our advocacy efforts to enhance regulatory guardrails to address the practice of abusive short selling. These changes will strengthen fairness, transparency, and investor confidence in Canada's capital markets.

TMX Invests In Consolidated Data Feeds to Enhance Trading Volume Visibility

The Canadian trading environment has become increasingly fragmented with the rise of alternative trading systems (ATSs). These ATSs have introduced multiple venues for market participants. This fragmentation can pose a challenge for investors, as accurately assessing a company's total trading volume becomes more difficult when activity is spread across various platforms. The lack of centralized data can complicate decision-making, as investors may struggle to get a clear picture of overall market activity.

In 2024, we announced plans to provide Canadian Consolidated Volumes by incorporating trading data across all Canadian venues trading TSX and TSXV symbols. This investment in data transparency will enhance the overall experience for Canadian and global investors, creating a complete picture of an issuer's liquidity. With this change, we expect financial websites and trading platforms to provide investors with Canadian Consolidated trading volumes as their default, providing a more accurate representation of a stock's Canadian liquidity.

With all development and testing for this initiative now complete, TMX Group is actively collaborating with downstream data vendors. Our focus is on ensuring they finalize any necessary work to expedite and prioritize the widespread adoption of this important enhancement.

TMX Advocates For Robust Guardrails On Short Selling

In April 2024, TMX Group advocated for changes to the regulatory framework by proposing stronger failed trade reporting requirements and/or introducing mandatory buy-in requirements. We believe these proposed changes will help address potential abusive short-selling practices.

We are pleased to see CIRO's updated proposed amendments to the mandatory close-out requirements, published for comments in January 2025.

CIRO's proposed amendments are more aligned with U.S. requirements on mandatory close-outs for failed trades and would require applicable Investment Dealers to:

• Close out a fail-to-deliver position in the event of a settlement failure in a listed security at the recognized clearing agency by specified timelines by buying or borrowing shares
    
• Proposed timelines for closing out failed trades are set to a default as follows:
    
  
  • No later than the trading day after settlement (S+1), also applicable to failed trades marked with short-marking exempt (SME) status.
  • No later than the third consecutive trading day after settlement (S+3) for ‘Long Sales' and persons with marketplace trading obligations.
     
• Pre-borrow the affected security where there has been a failure to close out by specified timelines for all future short sales in the security at issue,
    
• Provide certain reporting and notifications in connection with mandatory close-out requirements, and
    
• Have a reasonable expectation to settle on settlement date for Investment Dealer Members that are not Participants under UMIR (Proposed Amendments).

In closing, we want to reiterate our commitment to ensuring a fair, transparent, and thriving environment for all TSX and TSXV-listed issuers. As part of our continued efforts, we remain dedicated to advocating for your interests and driving positive change within the Canadian capital markets.

To gain a deeper understanding of these changes, address feedback and misconceptions, and have your questions answered, register here to join our webinar hosted by Doug Clark, Managing Director, Equity Product Design, on March 17th, 2025 at 1pm ET.

If you have any questions or would like more information about these initiatives, please don't hesitate to reach out to your dedicated Company Services Advisor.

Sincerely,

Robert C.W. Peterman
Chief Commercial Officer
Toronto Stock Exchange

To Discuss any of these matters or to review any abnormal trading patterns please contact:

Berk Sumen
Energy & Diversified Industries
Berk.Sumen@tmx.com
+1 403 333-4565

Omar Khafagy
Innovation & Life Sciences
Omar.Khafagy@tmx.com
+1 647 284-4535

Roy Wefuan
Mining
Roy.Wefuan@tmx.com
+ 1 514 567-1584