STATEMENT OF CORPORATE GOVERNANCE PRACTICES

Recognizing the leadership role that TSX Group has played in shaping corporate governance practices in Canada, Board of Directors and management of TSX Group continue to be committed to remaining at the forefront of good governance and to ensuring the highest standard of corporate governance. TSX Group’s corporate governance policies are designed to support the Board in discharging its responsibilities and to enhance shareholder value. Since becoming a publicly-traded company, we have implemented important initiatives to enhance our corporate governance practices and we regularly review these practices.

TSX Group’s corporate governance system complies with Toronto Stock Exchange’s Corporate Governance Guidelines (TSX Guidelines) and Multilateral Instrument 52-110—Audit Committees (MI 52-110). In addition, we continue to review our corporate governance practices with reference to the corporate governance guidelines recommended by the Canadian Coalition for Good Governance, and in anticipation of National Policy 580-201—Effective Corporate Governance (NP 58-201) and National Instrument 58-101—Disclosure of Corporate Governance Practices (NI 58-101) coming into force.

The Board is responsible for TSX Group’s governance and stewardship and overseeing its corporate strategy, affairs and management. The Board discharges this responsibility, either directly or, where appropriate, through committees, and by selecting and holding management accountable for TSX Group’s operations and for implementing its corporate strategy. The Board sets clear policies and direction for management’s responsibilities and authority. Among its many specific duties, the Board annually evaluates the Chief Executive Officer against corporate objectives (established by the Board with the CEO), and sets the CEO’s compensation. The Board also approves strategic plans and corporate objectives that the CEO is responsible for meeting, provides advice and counsel to the CEO, oversees ethical and legal conduct, and assesses financial performance. In addition, the Board approves the adequacy and form of compensation paid to Directors. In early 2004, the Board adopted a Board Charter (available on the TSX Group website) that describes its responsibilities.

At each regularly scheduled Board meeting, Directors and senior management examine, review and discuss a broad range of issues relevant to TSX Group’s strategy, business interests and growth initiatives. In addition, management provides the Board with timely and periodic reports on operational and financial performance. During fiscal 2004, the Board held eleven regular and two special meetings. Attendance by Directors at these meetings was more than 90%, either in person, by teleconference or by video conference. The Board plans to hold eleven meetings in 2005. At every meeting, the Board meets without management to ensure it is able to discharge its responsibilities independently of management. The Finance and Audit Committee can retain an outside advisor or expert in its discretion. The Governance Committee can retain an outside advisor or expert with the approval of the Chair, and an individual Director or other committee of the Board can retain an outside advisor or expert with the approval of the Governance Committee.

The Board has a non-executive Chair and knowledgeable and experienced Directors, a majority of whom are “unrelated” within the meaning of the TSX Guidelines. In addition, TSX Group complies with its recognition order issued by the Ontario Securities Commission (Recognition Order) which currently requires at least 50% of Directors to be “independent”, which is defined in the Recognition Order as being independent of management and not associated with a Participating Organization of Toronto Stock Exchange or a Member or Participating Organization of TSX Venture Exchange.

The Board also derives strength from the background, qualities, skills and experience of its Directors. The Governance Committee recommends candidates to the Board who are suitable for nomination to the Board on an annual basis. Nominees are selected for qualities such as integrity, business judgment, financial acumen, independence, business, professional or board expertise and capital markets experience. The Board also takes into consideration representation from geographic regions relevant to TSX Group’s strategic priorities.