Today, the Commissioner of Competition issued a “no-action letter” to Maple Group in respect of its proposed acquisition of TMX Group, Alpha Group and Canadian Depository Services.
The Competition Bureau’s review of the Maple / TMX transaction was extensive. Maple Group (whose investors are Alberta Investment Management Corporation, Caisse de dépôt et placement du Québec, Canada Pension Plan Investment Board, CIBC World Markets Inc., Desjardins Financial Group, Dundee Capital Markets Inc., Fonds de solidarité des travailleurs du Québec (F.T.Q.), National Bank Financial & Co. Inc., Ontario Teachers' Pension Plan, Scotia Capital Inc., TD Securities Inc. and The Manufacturers Life Insurance Company) announced on May 15, 2011, in the midst of the failed bid by the TSX to merge with the LSE, that the Group had submitted a proposal to acquire the TMX Group. Maple filed an application for an advance ruling certificate on June 7, 2011. The transaction was therefore under active Competition Bureau review for a period of some 13 months.
The issuance of the “no-action letter” by the Commissioner coincides with the issuance by the Ontario Securities Commission of final recognition orders regarding the proposed transaction. The Commissioner stated in a press release that “the measures contained in the OSC's final recognition orders materially change the regulatory environment sufficient to substantially mitigate the Bureau's competition concerns” thereby addressing the serious competition concerns that the Bureau had previously communicated to Maple in two areas: equities trading, and post-trade services, including clearing, settlement and depository services.
Notably, there is no consent agreement under the Competition Act in respect of the proposed transaction, with the result that beyond the standard one-year period after closing within which the Commissioner may challenge a transaction on the grounds that it substantially lessens or prevents competition, there will be no ongoing monitoring or enforcement of any competition law remedy. Such ongoing monitoring and regulation will instead fall to the OSC and other securities law regulators.