TMX Plots Roadmap for Expansion of Newly Launched TMX Analytics Platform

The TMX Analytics application currently provides real-time and historical information and analysis of the Canadian and US equity markets, leveraging Level 1 bid and offer data from TMX Group and other trading venues. The exchange then generates equity market analytics─such as market liquidity and price discovery, analysis of routing decisions, the expected impact of pre-trade models based on market dynamics, and post-trade, order flow and transaction cost analysis─based on the behavior of listed securities.

The exchange group is now focusing on building out the coverage of TMX Analytics, and will add Level 2 depth-of-book data for North American equities, as well as information on other asset classes, including fixed income, derivatives and energy, says Dominic Dowd, director of content and delivery solutions at TMX Group.

"Those are our initial areas in terms of expansion. We have our own proprietary fixed income trade data, which we are loading into the platform and creating a time-series of pricing and related analytics on Canadian bonds. We have a large amount of multi-asset class content, and will be very client-driven when it comes to adding it to the platform," Dowd adds.

He says conversations with clients revealed gaps in current market offerings, which prompted TMX to develop its own analytics platform. Ultimately, the exchange operator is attempting to become a go-to source of pricing information and analytics on the North American markets to help buy- and sell-side firms make better-informed trade and investment decisions. For example, a trader or investment manager can use the analysis to determine how securities are trading, and how that impacts their market share.

"There is a tendency to think that we just provide TMX content─and we are a natural fit for people investing and trading in Canada─but we provide much more than that," Dowd says. A material percentage of the client base for TMX's Market Insights suite of financial content, tools and applications, which includes TMX Analytics, consists of foreign investors in the US, London and Asia, he adds.

To generate its analytics, TMX consumes large quantities of trade and quote data and reference data in the cloud, which it normalizes before distributing to clients. By going directly to TMX for pricing and analytics, as opposed to generating the insights themselves, clients can minimize their operating costs, Dowd says. "The cost of building something like TMX Analytics in-house is very high on a per-firm, per-trader basis. We are positioned to deliver this as we are already have raw data and global content, and we are a trusted neutral provider," he says.