TMX Group Inc. (TMXGF.PK) expects its recently-announced adjustments to Electronic Liquidity Provider (ELP) pricing will have “an essentially neutral impact” on its revenues based on historical volumes, product and customer mix. The change eliminates the inverted pricing structure for larger ELPs as all providers will pay one rate.
Trading pricing is a zero-sum game over the long term, says GMP Securities analyst Stephen Boland.
“Automated trading systems (ATS) that do not have capital support may be squeezed,” he told clients.
Mr. Boland believes TMX is well-positioned with multiple revenue streams. He also expects ATSs will announced a flurry of new products and pricing to stop the hemorrhaging.
The analyst continues to rate TMX shares a Buy with a C$37.50 price target.