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INDUSTRY SPOTLIGHT THE GLOBAL HUB Mining lawyers' opinion on the TMX-LSE merger's effect on their industry remains divided. By Jeremy Hainsworth A testament to Canada's booming mining sector, the Toronto Stock Exchange is the world's larg- est exchange for mining. So when its parent company, TMX Group Inc., announced on Feb. 9 it would merge with London Stock Exchange Group plc., it got the immediate attention of the mining industry. As regulators deal with the merger and details continue to emerge, the industry remains cau- tiously optimistic. The two companies joining forces say the change will attract new investors and a growing pool of capital, lower the cost of capital, and enhance the profile and reputation of Canada's markets. The idea is that the larger company would provide easier access to markets, height- en trading activity and lead to improved liquidity, and enhance mutual recogni- tion between securities regulators. But lawyers involved with the mining and securities sector view the merger with trepidation as many unknowns remain. TMX CEO Thomas Kloet told the Toronto Board of Trade on April 4 the proposal is for a pooling of ownership at the holding company level — not a merger of the exchanges themselves. "It is a critical distinction," he said. "Each of our regulated exchanges — Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange, the CDCC derivatives clearing house and Natural Gas Exchange — will operate as before." From Toronto, a Canadian resident will lead the combined group's global listings business. "The effort to attract, retain, and nurture listings, for compa- nies of all sizes, will be directed from Toronto for the entire group — world- wide," Kloet added. The company maintains TSX and TSX Venture Exchange together are the No. 1 destination for mining and energy companies in the world, with close to 2,000 listings on two mar- kets, representing almost $1 trillion in market capitalization. Expanding the exchanges' reach and breaking down barriers will only create new Canadian INHOUSE JUNE 2011 • 33