2006 ANNUAL REPORT
CHAIR’S LETTER
TO SHAREHOLDERS
CEO’S LETTER
TO SHAREHOLDERS
STATEMENT OF CORPORATE
GOVERNANCE PRACTICES
2006 MANAGEMENT’S
DISCUSSION AND ANALYSIS
Non-GAAP Financial Measures
Vision
Overview of the Business
Review of Operations – 2006
Liquidity, Capital Resources and Deferred Revenue
Selected Annual Information
Quarterly Information
Critical Accounting Estimates
Disclosure Controls and Procedures
Strategy and Outlook
Forward-Looking Statements, Risks and Uncertainties

FINANCIALS
CORPORATE INFORMATION
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STRATEGY AND OUTLOOK (continued)

Extend Pre-eminent Domestic Position
We will seek growth opportunities through diversification both horizontally into related markets in which we can leverage our competitive advantages and vertically into other areas of the capital markets. Two areas into which we have already expanded are fixed income and energy markets as follows:

Fixed Income 
Following our fixed income acquisitions in 2006, we are now the leading provider of fixed income indices in Canada, and provide IDB, fixed income trading. In October 2006, we acquired Scotia Capital Inc.’s* Fixed Income Indices, its PC-Bond® analytics, and related data assets. In December 2006, we acquired Shorcan, Canada’s first fixed income IDB. Shorcan offers clients trading in federal, provincial, corporate and mortgage bonds and treasury bills. Through our approximate 47% stake in CanDeal, we also provide dealer to client fixed income trading. CanDeal has achieved significant growth since its inception and reported a profit of $0.1 million in the second half of 2006. CanDeal continues to focus on expanding its product and service offering, adding more liquidity providers and attracting more institutional customers. CanDeal also provides access beyond Canada through its technology and co-marketing agreement with Thomson TradeWeb®.

Energy 
We entered the energy trading and clearing business in March 2004 when we purchased NGX. NGX will continue to focus on growing its business. In October 2006, we added to our energy business when we acquired Oxen Inc. which owns the Alberta Watt Exchange Limited (Watt-Ex), a platform for providing ancillary services to the Alberta Electric System Operator which is used to balance supply and demand on the Alberta grid.

Expand Internationally
We will look for ways to expand beyond the borders of Canada, organically and through new acquisitions, strategic alliances and investments.

U.S. Market 
We will continue to place greater focus on making Toronto Stock Exchange the market of choice for U.S. market participants for trading all Toronto Stock Exchange listed securities. We plan to pursue multiple initiatives across all business areas:

  • We will seek to capture an increasing proportion of trading in Canadian-based interlisted stocks by continuing to meet U.S. and global connectivity standards (FIX), fostering best execution and educating the market on TSX’s value proposition. Additionally, we will target executable order flow from U.S. market participants for Toronto Stock Exchange listed securities.
  • We plan to leverage and expand the relationship between U.S. data sales agents and market data vendors with the goal of increasing data sales.
  • We will seek to attract U.S. listings on our exchanges and focus on those areas where we provide a competitive advantage including targeting SMEs and issuers in the natural resource sector. We have planned a targeted seven-city marketing campaign for 2007.

Global Issuers
We will work to attract foreign issuers, leveraging our global competitive advantages in:

  • Mining and Oil & Gas Sectors: We will seek to attract additional listings of global mining and oil & gas issuers by capitalizing on our international reputation of having a leading marketplace for those issuers. Based on the most recent data, as of September 30, 2006, we had approximately 50% market share of the world’s global mining financings by value and approximately 59% of all publicly traded mining issuers were listed on one of our equity exchanges. We also listed the greatest number of oil & gas issuers globally. We have prioritized international target markets, focusing first on the US, then on Australia, Europe, South Africa, and China. We will increase our participation and presence in strategic events, such as conferences and listings forums. We will further develop and enhance relationships with key stakeholders and strategic partners to enable quick response to listing inquiries by prospective issuers.
  • Structured Equity Products: We will also leverage internationally our domestic success by listing structured equity products, such as ETFs.

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