Erosion risks

• Regulatory changes that lower entry barriers for new listing venues
• Shift of growth companies staying private longer

Leading indicators

• New listings (count) on TSX/TSXV
• Equity capital raised on TSX/TSXV
• Number of TSXV-to-TSX graduations

Counterarguments

• Canadian issuers can choose alternative Canadian exchanges or list in the U.S. (NYSE/Nasdaq).

Erosion risks

• Market fragmentation reducing liquidity concentration
• Prolonged IPO drought reducing new issuer inflow

Leading indicators

• TSX/TSXV trading liquidity metrics (value traded, spreads)
• Pipeline indicators (IPO filings, prospectuses)

Counterarguments

• Liquidity can fragment across venues; investors can access issuers through other exchanges or private markets.

Erosion risks

• Reputational damage from prolonged outages or listing quality issues

Leading indicators

• Issuer satisfaction / retention
• Share of new Canadian IPOs choosing TSX vs alternatives

Counterarguments

• Brand matters less when fees and liquidity are similar across venues.

Erosion risks

• Commoditization of transfer agency and filing services
• Aggressive pricing from larger global providers

Leading indicators

• Issuer/client counts
• Net retention and churn
• Average trust balances (interest income driver)

Counterarguments

• Large global incumbents can bundle services and undercut pricing; switching is feasible for many issuers.

Erosion risks

• Regulatory process changes that reduce service differentiation
• In-house tooling by large issuers

Leading indicators

• New compliance modules launched
• Share of clients using multi-jurisdiction filing services

Counterarguments

• Compliance features are replicable; regulators can standardize interfaces.

Erosion risks

• Further fragmentation of Canadian equity trading across marketplaces
• Fee compression and rebate competition

Leading indicators

• Domestic equities trading market share (CIRO)
• Securities traded volume trend
• Average rate per security / pricing actions

Counterarguments

• Order routing can quickly shift flow to alternative venues offering better economics or execution quality.

Erosion risks

• Technology cost inflation outpacing volume growth
• Competitors matching performance at lower fees

Leading indicators

• Technology spend vs volume growth
• Latency / uptime metrics
• Market quality statistics (spreads, depth)

Counterarguments

• Cloud/standardized exchange technology can reduce historical scale advantages.

Erosion risks

• Major operational outage or cyber incident
• Regulatory intervention that mandates alternative settlement options

Leading indicators

• Settlement efficiency (fails rate)
• System uptime/incident frequency
• Regulatory findings and remediation timelines

Counterarguments

• Clearing/settlement could evolve via interoperability standards or new regulated entrants over long horizons.

Erosion risks

• Regulatory changes to fee frameworks or participant governance
• Implementation risk in major post-trade modernization

Leading indicators

• Changes to recognition orders/oversight frameworks
• Progress against modernization milestones and budgets

Counterarguments

• Regulators could push for fee reductions or structural changes that cap profitability despite infrastructure centrality.

Erosion risks

• Regulatory shifts enabling competing domestic derivatives venues
• Product relevance declines as hedging migrates to U.S. markets

Leading indicators

• Contracts traded and open interest
• Adoption of new products (e.g., rate benchmarks)
• Clearing fee changes and participant responses

Counterarguments

• Canadian market participants can hedge using U.S. derivatives (e.g., CME) if products are more liquid or cheaper.

Erosion risks

• Clearing competition from global CCPs
• Major default event challenging risk model confidence

Leading indicators

• Clearing volume and margin requirements
• Stress test results disclosed by regulators/CCP
• Participant concentration trends

Counterarguments

• Global CCPs can compete on margin offsets and cross-product netting, reducing domestic advantage.

Erosion risks

• Fee compression from intense inter-exchange competition
• Market structure changes (payment for order flow rules)

Leading indicators

• BOX options market share
• Volume growth vs industry
• Rate per contract / revenue per contract

Counterarguments

• Dominant U.S. options exchanges can outspend on incentives and technology; share can be volatile.

Erosion risks

• Energy venues/brokers develop competing proprietary tools
• Market structure shifts (venue consolidation) reducing neutral hub role

Leading indicators

• Total licensees and connections
• Recurring revenue (ARR) trend
• Net revenue retention (NRR)

Counterarguments

• Key venues could steer customers to competing platforms or restrict access to data needed for integration.

Erosion risks

• Customer concentration and contract renegotiations
• Regulatory changes in energy trading affecting workflows

Leading indicators

• Total connections trend
• NRR staying >100%
• ARR per licensee

Counterarguments

• Network metrics can rise while pricing compresses if customers negotiate down ARPU.

Erosion risks

• Clients reducing enterprise agreements / consolidating vendors
• Regulatory push for broader access/price controls on market data

Leading indicators

• Professional market data subscriptions trend
• Enterprise agreement renewal outcomes
• Co-location utilization

Counterarguments

• Large data aggregators can bundle multi-venue data and pressure standalone feed pricing.

Erosion risks

• Commoditization of low-latency market data access
• Migration of analytics workloads away from co-location

Leading indicators

• Subscription counts (TSX/TSXV, MX)
• Revenue per subscription
• Latency-sensitive customer growth

Counterarguments

• Customers can source similar analytics from vendors even if raw exchange data is licensed.

Erosion risks

• Index fee compression from large incumbents
• Regulatory scrutiny of index provider governance/conflicts

Leading indicators

• Average and end-of-period AUM tied to indices
• Indexing revenue growth vs AUM growth
• New index wins / product launches

Counterarguments

• Large index providers (MSCI, S&P DJI, FTSE Russell) have stronger brands and distribution, limiting long-term pricing leverage.

Erosion risks

• Digital distribution revenue decline
• Event-driven revenue cyclicality

Leading indicators

• Analytics subscription growth
• Event attendance/sponsorship trends
• Digital distribution monetization metrics

Counterarguments

• Analytics and research are competitive and can be substituted by other ETF data/analytics platforms.