Overview of the Business
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OVERVIEW OF THE BUSINESS (continued)

Historical Market Data and Corporate Information 
Historical market data products include market information (such as historical pricing, index constituents and weightings) and corporate information (such as dividends and corporate actions). This information is generally made available at the end of the trading day and is used in research, analysis and trade clearing. 

Historical data products are generally sold for a fixed amount per product accessed. Fees vary depending on the type of end use. Data products to be used for commercial purposes require an enterprise-wide license for internal redistribution. We produce two electronic historical data publications for each exchange, a Daily Record and a Monthly Review, both of which are sold on a subscription basis. 

In 2005, we introduced a Daily Trade and Quote product with Nexa Technologies. The product includes trade and quote data and was developed for quantitative investment professionals who require research-ready historical equity data to design, test and validate trading strategies and order execution systems.

Index Products 
We have long supported indices to facilitate the measurement of equity market performance. The first Canadian indices were introduced by Toronto Stock Exchange in 1934 and were subsequently modified to reflect a substantial increase in listings. The Toronto 35 was introduced in 1987 and was the basis for the world’s first exchange-traded fund, TIPS® (Toronto 35 Index Participation Units). TSX Datalinx and Standard & Poor’s (“S&P”) collaborated in 1998 to bring global recognition to the Canadian markets through the well-known S&P brand. 

Several new indices were introduced including the S&P/TSX 60 Index (the large capitalization index for the Canadian equity market) and in 2002, the S&P/TSX Composite Index (the “Index”). The S&P/TSX Composite (formerly the TSE 300 Composite Index®) is the most quoted index for the Canadian equity marketplace, appearing with a high degree of frequency in business media and thereby strengthening brand awareness of TSX Group. In addition, a fixed-income index, based on multi-dealer pricing was launched in 2005, in which S&P calculates the index, and TSX distributes the data. TSX Datalinx has an arrangement with S&P under which license fees received from organizations that create products, such as mutual funds and exchange-traded funds (ETFs), based on the S&P/TSX indices, are shared. In general, these license fees are based on a percentage of funds under management in respect of those products. 

Business Services – TSX Technologies 
We have assembled a team of exchange technology professionals with extensive industry experience in installing and operating trading and related systems at other global exchanges. We currently provide Market Regulation Services Inc. technology and related services necessary to conduct its review and real-time monitoring of trading. Market Regulation Services Inc. pays us fees for these services, negotiated on an arm’s length basis, in accordance with an agreement which also details service levels. We also have an agreement with CanDeal to provide technological services for a fee in support of its institutional fixed-income trading system. 

  • In 2005, business services revenue represented $7.9 million, or 3% of our revenue. 
  • In 2004, business services revenue represented $8.4 million, or 3% of our revenue. 

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