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Canadian IPO pipeline robust, says TMX CEO

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TMX eyeing launch of new ATS venue for fixed-income

trading

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TMX cautious on prediction markets despite recent boom

By Anirban Sen

NEW YORK, Nov 25 (Reuters) - TMX Group ( TMXXF ), which

operates the Toronto Stock Exchange, is expecting a big pickup

in stock market listings heading into 2026, boosted by a robust

pipeline of companies that are aiming to tap the capital markets

in the coming months, executives at the firm told Reuters.

Canadian initial public offering activity has been subdued this

year compared to the U.S. market for stock market launches,

which is witnessing its best year since 2021. One of the reasons

for the slowdown has been U.S. President Donald Trump's tariffs

on imports from Canada, according to capital market experts.

However, the recent C$704 million ($499.01 million) Toronto

IPO of Brookfield-backed energy firm Rockpoint Gas Storage has

raised hopes of a meaningful pickup in listings. IPOs in the

U.S. have raised about $30 billion this year, up nearly 13% from

last year, according to LSEG data.

U.S. PICKUP SPURS INTEREST IN CANADA

"The U.S. generally always leads the IPO market in terms of

liquidity," said TMX CEO John McKenzie. "As we see deals get

done in the U.S. and get priced well, that's giving the same

conditions in the Canadian markets. We are seeing deals come to

market, and we're seeing a deep pipeline of deals that can come

(later)."

TMX, which operates an off-exchange trading platform for

equities in the U.S. called AlphaX US, is looking to expand the

platform by adding a new book of business, said Heidi Fischer,

president of U.S. equity trading at TMX. The firm is also eyeing

a bigger push into fixed-income trading as it explores launching

a new alternative trading system for the asset class, said

Fischer, adding that plans for the new ATS are not finalized and

it is not expected to be unveiled imminently.

TMX, which opened a New York office in November to garner more

U.S. business, generates more than half of its overall revenue

outside Canada. In recent years, TMX has expanded its Trayport

electronic trading platform for energy and commodities into the

U.S. In 2023, TMX acquired U.S. data analytics firm VettaFi

Holdings, which is an index provider to the exchange-traded fund

industry, for about $1 billion.

"It's always been the ambition of the organization to be

invested in this market as this is the most competitive

market in the world, and the most liquid capital market," said

McKenzie.

TMX CAUTIOUS ABOUT PREDICTION MARKETS

TMX is taking a more cautious approach than some of its larger

U.S. peers toward prediction markets, which have witnessed a

massive jump in mainstream investor interest after being

bolstered by a friendlier regulatory regime under the Trump

administration. In October, New York Stock Exchange parent

Intercontinental Exchange ( ICE ) struck a deal to invest up to

$2 billion in Polymarket, while CME Group ( CME ) and CBOE

have also unveiled plans to enter prediction markets.

"We're not comfortable with the risk associated with it for

us to provide to our clients - and that's where some of the

divide is coming now," said McKenzie. "It has to be

demand-based. We need to be ready, but we need to see that

there's a demand curve that makes sense for us."

($1 = 1.4108 Canadian dollars)