Q2 2021 TMX Group Ltd Earnings Call
Good morning, ladies and gentlemen, and welcome.
Group Ltd.
Financial results conference call.
And then.
Following the presentation, we will look at the edge.
The question and answer session.
And.
Please press star zero for the operator.
The skull, it's being recorded on Thursday August 5th 'twenty 'twenty 1.
I would now like to share the conference the ritual Paul Malcolmson. Please go ahead.
Well, thank you operator, and good morning, everyone I.
I hope that you and all of your families are staying well and safe. Thank.
Thank you for joining us this morning for the second quarter of 2021 conference call for T M ex group.
As you know we announced the results late yesterday and a copy of our press release is available on our website <unk> com under Investor Relations.
This morning, we are once again, joining virtually and have with us John Mckenzie, Our Chief Executive Officer and Keith.
EBIT Arnold our Chief Financial Officer, joining us for his first earnings call of <unk> Welcome David.
Following the opening remarks, we will have a question and answer session. Before we begin I want to remind you that certain statements made on today's call may be considered forward looking I refer you to the risk factors contained in our press release and reports that we filed with the regulatory authorities and with that I'd like to turn the call over to John.
Well, thank you Paul and good morning, everyone.
Thanks for dialing into the call day to discuss TM ex group's financial performance for the second quarter and first half of 2021.
And as people here in Canada and across much of the world work towards the next normal phase of life during the COVID-19 pandemic.
I want to start by wishing everyone listening and this morning, and the very best of health on behalf of all of US here at <unk> ex.
Now as Paul mentioned, we announced our Q2 'twenty 1 results last night and I Trust. Many of you have had the chance to read through our financial statements and related disclosures and today is an exciting day for us as we welcome the new voice to our quarterly discussion David <unk>, Our new Chief Financial Officer, David join the organization at the beginning of June and has hit the ground virtually running and men's.
Irrespective of climate, if anything and herself to <unk> and his new role and getting into it was of great finance team we have here.
I will turn the call over to David and a few minutes and he will take us through the strong financial results for the quarter.
But I want to focus my comments. This morning on <unk> reported performance throughout the first 6 months of 2021 and the progress we are making and some of our priority initiatives as we move back into the back half of the year.
<unk> operating results reflect some of the considerable successes on the first half of 2021 and including the vitality of our capital markets ecosystem, including some significant records and milestone achievements and our core listing franchise.
And the benefits of <unk> long term diversification strategy and have demonstrated the ability to leverage the depth of capabilities across the organization to add value to the markets, we serve and ultimately to achieve growth.
And while we operate in the industry is subject to sudden and unpredictable change Ah Kee and consistent factor contributing to <unk>. The success this year as much as any other and our long history at the center of Canada's capital markets as the unwavering commitment of our people.
Since the beginning of the for the COVID-19, pandemic people and all walks of life of face considerable challenges and their efforts to balance of remote work and family life and.
And I'd like to recognize the fantastic ethic efforts of TM ex employees staff working in our offices and at home to adapt to the increased workload of of busy market and ensure we continue to provide excellent service to our clients here in Canada and around the world.
Turning now to our results and the first half of the year revenue was 497 million and increase of 13% from the first half of 2020.
Diluted earnings per share grew 27% or 24% on an adjusted basis compared with the first 6 months of 2020.
Overall growth was driven by strong performances across several of our business areas, including capital formation equities and fixed income trading and clearing and trade port.
Total operating expenses increased 1% from the first 6 months of 2020, largely due to higher costs related to our short term employee incentive plan and sales commissions and increased severance costs.
These increases and expenses were somewhat offset by the net litigation settlement of costs incurred and the first half of last year.
Now taking a closer look at performance of our business areas.
Revenue from capital formation was $133 million and increase of 48% from the first half of 2020.
Driven largely by a surge and the number of issuer financings and financing dollars raised on Toronto stock exchange and TFS ex venture exchange.
We are in the midst of the strongest IPO market and 15 years with 35 corporate Ipos on Toronto stock exchange and Ts ex venture exchange and the first half of the year.
In total we had 247 new listings on <unk>.
79% increase from the first half of last year.
And TM ex exchanges ranked number 2 and the world and new listings among our global peers through June 30th According to data for the World Federation of exchanges.
And momentum and companies coming to market has continued through the early weeks of summer.
Entrepreneurs, and Canada and around the world, our leveraging of our public markets to access growth capital and the profile of the visionary companies choosing of public path to growth is as broad as ever.
And all market conditions. It is crucial to the long term success and competitiveness of our marketplace. So we continue to seek out adaptive ways to address the needs of businesses of all sizes and in various stages of their development.
And to look at a few of the additional key stats for the first half provide some help for context as to the broad scope of the success.
In terms of equity financing on TSS and tears ex venture we had our best first half in history with the combined total of $34.7 billion raised by your issuers of 101% increase over the first half of 2020 and.
And for context issuers on the 2 exchanges raised $42.8 billion and the entirety of 2020.
Total combined <unk> and <unk> ex venture market capitalization reached 4 trillion for the first time and our history, including the 100 billion on TFS ex venture also and all time high.
And.
And tears ex venture also graduated 19 companies for the Toronto stock exchange through June more than any other first half and the last 10 years.
And we're seeing encouraging signs that our recent efforts to improve and important program geared to serving this critical foundation of our 2 tier ecosystem is working for our clients.
At the beginning of the year Ts ex venture exchange revamped its signature capital pool of company or CPC program, which is a unique listing vehicle that is accounted for nearly 1 third of the new T. S. Ex venture exchange of listings and the past 10 years.
The changes and the policy for designed to increase flexibility reduce the regulatory burden and improve the overall economics per person.
And for perspective issuers and the early returns are very positive and the first half of the year Ts ex venture listed the 37, new <unk>, a 131% increase from the first half of 2020.
And in addition, our other issuer services revenue also increased increasing by $7 million or 53% from the first 6 months of last year, reflecting increased revenue from Ts ex trust due to higher transfer agent fee revenue and increases in corporate trust and recoverable revenues.
Our <unk> ex trust team has been handling more files and ever as increased market activity has boosted demand for our corporate Trust transfer agent Register and registry of planned services.
And the expected close of our ASD, Canada transaction announced in September of last year will further augment our ability to serve the needs of companies across the marketplace broadening the scope and scale of its service offerings.
Now I'd like to turn the equity trading.
Revenue from equities and fixed income trading and clearing was $126 million and the first 6 months of 2021 up 7% from last year.
The year over year growth was driven by an increase of 88% and Ts ex venture exchange volumes and 43% higher volumes on <unk> Alfa, partially offset by an 11% decrease and volumes on the Toronto stock exchange.
Trading activity serves on TFS ex venture throughout the first half, reflecting the increased investor interest in the day diverse set of early stage companies listed on our world leading junior market.
The S&P <unk> ex venture composite index was up 55% year over year through the end of June ranking among the top performing markets and the world.
And across our core equities markets, we continue to be committed to enhancing the TM ex trading client experience.
Our equities trading team continues to work with clients and stakeholders to ensure our markets remain responsive innovative and globally competitive.
Our key upcoming initiatives remain on track the launch of our new improved <unk> ex market on close facility or Mark is also due to launch on schedule of this fall.
The Mark facility plays a crucial role in Kansas and markets setting the official closing price for eligible Toronto stock exchange and selected <unk> ex venture exchange listed issues and facilitate facilitating benchmark for portfolio rebalancing.
And we are especially proud to bring the revamp of mark to market. This year. As this initiative is the result of dedicated collaborative effort with our industry partners to better align our model with global peers and provide clients with increased transparency and consistency of execution.
And TSMC dark Canada's fastest growing dark pool is set to launch trading and conditional orders and the fourth quarter of 2021 of move designed to increase functionality and further attract liquidity.
The additional the addition of conditional orders is the next step and the TSA. The dark client engagement strategy as we continue to explore ways in which we can augment and depth of functionality on TX ex dark and build on its reputation as the premier dark pool and Canada.
Now moving on to trade port.
Revenue for trade Port was $73.8 million of 10% increase from the first half of 2020, driven by a 7% growth and the average number of subscribed subscribers.
The average number of trader subscribers was up 7% from the first half of last year as was the average total subscribers.
<unk> continues to add to its capability to serve the data and analytics analytical needs of traders portfolio managers and analysts across the rapidly evolving global energy market.
And June <unk> completed the successful acquisition of trade signal, a leading producer of rule based trading and technical chart analysis software.
Now in current and integrated into <unk> Joule network. The addition of trade signal brings enhanced charting and analytics feature to the trade for its primary client offering along with opportunities for clients of test, both short and long term trading strategies.
Revenue from derivatives trading and clearing was $71.4 million up 1% from the surf for 6 months of 2020, including a 3% increase and revenue from Amex and CDC.
Overall on ex volumes increased 12% when compared with the first half of last year.
The revenue growth was somewhat offset by a lower revenue per contract due to and unfavorable product mix.
Within the overall growth and volumes, we are encouraged by the keen investor interest, we are seeing and specific products, including single share futures with average daily volumes up 32% over the first 6 months of last year.
A 23% growth and equity and ETF options, and 8% volume increase and the interest rate derivatives.
Overall open interest at June 30 of 2021 was also up 23% from last year.
Now looking forward I'm ex US 30 year, New government of Canada futures contract or LGB contract is on track to launch by year end.
And together with the recently launched <unk> Z, our 2 year government of Canada contract. The LGD will complete and mix is client driven initiative to create liquidity points along the entirety of candidates listed yield curve.
And the next phase of Mx's extended hours initiative remains on track as well as we prepare for the launch of trading on Asian hours in the second half of this year.
Now on closing as we move into the back half of 2021 and continue to adapt to evolving conditions and our operating environment and and just about every facet of life I want to clearly reaffirmed <unk> commitment to serving clients across our business throughout our market ecosystem and around the world with excellence and.
And we have recently taken on some important steps to enable <unk> to fulfill that commitment today and long into the future.
Earlier this year, we embarked on an enterprise wide exercise to define the high performing culture, we want <unk> to be known for with the new purpose statement and values the guidance and the way, we do business with both our stakeholders and each other.
As part of that process, we gathered input from employees across all levels locations and businesses and brought together senior leaders to work through the insights and engage in and open and productive conversation about how to realize our potential and fuel of the future success of Tms.
And we're excited to introduce our new purpose statement and values that will serve to shape. The high performing culture, we want to continue to build together.
Our purpose is very clear, we make markets better and empower bold ideas.
It's a rallying cry from all of US here at <unk> ex it's foundational to our business strategy and its intrinsic to who we are.
And our values are focused on what matters and how we deliver.
Client Centricity, we put clients at the heart of everything we do courage, We act with courage to be bold and to innovate and trust, we operate with Aneel, the and respect and integrity, fostering and inclusiveness and belonging.
Now enacting of culture shift doesn't happen overnight. It is a journey and what I find most encouraging as we move forward and this journey is the pride and dedication TNX. Please bring to the rules every day.
These core attributes are key contributing factors to our success today and crucial to ensuring and Tms tnx's success into the future and.
And with that let me turn the call over to David.
Thank you very much John for the kind introduction and warm welcome.
And I'm very excited to be part of the team.
For the last couple of months I've had the opportunity to work with such a talented and diverse team here at the <unk> ex.
And over the next couple of months I look for to meeting and getting to know those analysts and investors have not yet had the chance to meet.
Turning now to our financial results.
Q2, 'twenty, 1 was a very strong quarter with double.
Digit revenue and earnings per share growth.
And where revenue increases from capital formation derivatives trading and clearing.
Global solutions insights and analytics, where GSI a and.
And Cvs, partially offset by low equities and fixed income trading revenue.
Operating expenses were down 6% of the Q2, 'twenty, mainly driven by approximately $12 million of net litigation settlement costs in Q2 of last year.
Our adjusted EBITDA margin increased to 63% for Q2 'twenty 1.
Diluted earnings per share grew 15%, reflecting the higher revenue and lower expenses and included a $19.8 million increase in Q2, 'twenty 1 income tax expense relating to a change in the future of U K corporate income tax rate.
Our adjusted diluted earnings per share increased by 25% in the quarter.
Share of net income from box and Q2, 'twenty 1 increased by approximately $5.9 billion, reflecting higher box revenue driven by a 140% increase in volumes compared to Q2.2000.
The revenue growth and capital formation was primarily driven by higher additional listing fee revenue on both PSX and TSA ex venture.
In Q2, 'twenty, 1 relating to both an increase and the number of financings and the total financing dollars raised.
The increase on TSA ex reflected of 66% increase and the number of transactions billed at the maximum listing fee of 250000 as well as a 19% increase the number of transactions billed the low the maximum fee.
And sustaining listing fees also increased in Q2, reflecting an increase and the market capitalization of issuers at December 31, 2020, as well as an increase in new listings and the first half of 2021.
We now estimate that the increase and sustaining listing fee revenue will be approximately $7 million for 2021 up from the previous estimate of approximately $5 million.
They will also increase revenues from TSA ex trust and initial listing fees in Q2, 'twenty, 1 compared to last year.
Derivatives trading and clearing revenue grew by 13% from Q2.2020 to Q2 'twenty 1.
The volumes on index were up 24% compared to last year.
And was lower revenue per contract, reflecting an unfavorable client mix and.
In addition, there was a decrease of approximately 600000 and revenue mainly relating to the agreement to provide transitional services to box, which ended in Q2 of last year.
Revenue and our GSI a segment was up 4% of Q2.2020 with increases from both trade port and the traditional data business.
Revenue from trade for it was up 9% and Canadian dollars or 8% and Sterling.
The increase was driven by a 9% growth and total subscribers in Q2, 'twenty, 1 compared with Q2.2020.
Revenue in our traditional data business was up 1% driven by increases in both professional and non professional subscribers usage based quotes co location benchmarks and indices.
The average number of professional market data subscriptions for PSX and <unk> ex venture.
Products grew by 6% in Q2, 'twenty, 1 compared with last year and index subscriptions were up 6%.
The higher revenue was mostly offset by an unfavorable impact of approximately $2.8 million from a stronger Canadian dollar relative to the U S. Dollar of the Q2.2020.
Revenue from CBS was up 13% and Q2, 'twenty, 1 reflecting of Hyatt issue of services depository and settlement and international revenue as well as higher revenues for account transfer online notification.
The revenue increases were partially offset by equities and fixed income trading revenue, which decreased 15% and Q2, 'twenty 1 compared with Q2 'twenty.
The decrease was driven by a 12% decline and the overall volumes of securities traded on our equities marketplaces Trey.
Trading volumes on <unk> ex securities decreased by 26% and the quarter, while volumes on TSA ex venture exchange and TSA ex Alpha exchange increased by 18 and 5% respectively.
There was also a decrease and fixed income trading revenue, reflecting lower activity and swaps and government of Canada bonds and Q2 'twenty 1.
These decreases were partially offset the high yields on all of our equities marketplaces, and Q2, 'twenty, 1 compared with Q2 'twenty.
As I mentioned earlier operating expenses in Q2, 'twenty, 1 decreased by 6% compared to Q2 last year.
The lower expenses were mainly driven by the net litigation settlement costs of $12.4 million included in SG&A costs in Q2.2020.
And there's also a $1.8 million decrease in expenses in Q2, 'twenty, 1 largely relating to of NIS 2 of release of the provision for restoration costs for our data center.
These decreases and expenses were partially offset the higher head count and payroll costs highest software licensing and maintenance costs as well as higher consulting and director fees and Q2, 'twenty, 1 compared with Q2 of last year.
Turning now to sequential results sequentially revenue decreased 7 million of 3% from Q1.21 to Q2 'twenty to 'twenty 1.
Primarily attributable to lower revenue in equities and fixed income trading and derivatives trading and clearing partially offset by higher revenue and capital formation.
Operating expenses decreased $7.2 million of 6% from Q1, 'twenty, 1 reflecting lower short term employee performance plan and sales commission costs of $3.3 million lower payroll cost of $3.1 million and lower long term performance incentive plan costs of $1.6 million.
In addition, there was a $1.8 million decrease in operating expenses largely relating to 2 of the release of the provision for restoration cost for our data center and Q2, 2021, which I mentioned earlier the.
These decreases were partially offset the higher director fees increased software license and maintenance costs and higher bad debt expense from Q1.21 to Q2 'twenty 1.
Turning now to our balance sheet and Q2 'twenty..1 we spent $18.6 million repurchasing of 140000 of our common shares under our normal course issue of program.
Our debt and adjusted EBITDA ratio was 1.8 times at the end of the quarter.
We also held just over 419 billion and cash and marketable securities at the end of the quarter.
It was about $250 million in excess of the $165 million.
To retain for regulatory and credit facility purposes.
Yesterday, our board approved a quarterly dividend of 77 cents per common share payable to payable on September 30 to shareholders of record as of August 20th at.
And at 41% of our adjusted EPS. This is consistent with our target payout ratio of 40% to 50%.
And now I'd like to turn the call back to Paul.
Thanks, David Operator could you. Please outline the process for the question and answer session.
Thank you.
Ladies and gentlemen.
Question and answer session.
Should you have any questions. Please.
You want on you touched on the phone.
You will hear the Threep.
A question for your questions.
<unk>.
Should you wish you the life of the polling process for us.
If you are using speaker for them.
And for price and any 1 moment for your first question.
Your first question comes from.
I would say VC capital markets. Please go ahead.
Okay. Thanks.
The earnings contribution from equity accounted investees of being a tailwind for the past few quarters, it looks like that relates to box.
It might be helpful. If you could give some insight on your outlook for how that line item might travel over the next 12 months yourself.
And to get a sense of whether that contribution might be sustainable.
Thanks, Nick It's David Arnold share. So you are correct that is our investment and box.
For those not familiar to the Boston the options exchange.
Thank the the.
The performance over the air is really market driven and.
1 needs to play close attention to the <unk>.
<unk> trading statistics, and the U S and the.
Publicly available information. So we do look closely at debt mix to try and project and model out where the earnings might land. So thats the.
The first place that I would guide you towards the second thing that I would mention though is that the.
And Q4 last year Youll recall, we had a lumpy adjustment for incentive compensation true ups at box and so that was a bit of a surprise to us and we accounted for that so.
And we're working with them to make sure that those kinds of surprises I don't come in future quarters, I would expect a minor adjustment for that in Q3, and then hopefully and things just stabilize purely driven by market characteristics.
Okay.
Helpful. And then my second question is just on revenue per contract at index.
It was lowered in Q2, and I think you cited product mix for the in quarter impact, but looking at that ratio of over a longer period of time and it looks like it's been declining.
For a year or more than of over a year. Maybe 2 years is there anything else impacting the revenue capture at and ex or is that strictly been a product of mix changes over time.
It's been a product mix over time.
And it continues I mean, as we launch products and.
Create liquidity and enable us to market those products and.
And there are various incentives, which obviously impact the revenue per contract is as you know Nick and I don't.
John if you want to add any additional color.
Yes, I mean, the 2 pieces of all add Nick if you think about performance, even just over the year, so far and as it compares where we've seen the largest growth is on things like single stock futures year over year equity options year over year, those are lower revenue per contract products.
But as as David said as we have been launching new futures products like the 5 year. When we do the 30 year of the 2 year. We did last year, we do bring the market with the with a richer of incentive program to bring liquidity on to them and so as those products grow it does have that impact on that mix on RPC, but over the long term those products those promotions.
They will run off and those prices will normalize as those products get stabilized they have ongoing liquidity and they can be then run like we run the the CGP. The 10 year bond program today, So and some cases its mix and in some cases is around the incentives that are temporary to help the products get going.
Understood. Okay. Thanks for taking my questions.
Okay.
Thank you.
Our next question comes from edge and records with BMO capital markets. Please go ahead.
Thank you and good morning.
And as yet.
But at the start on on derivatives.
Volumes are trending that's been trending favorably and the first half and it's great to see.
The next planning to relaunch, the 30 year and as well as the upcoming especially into Asia.
And so.
So based on your experience launching new products and the recent years what type of volume benefit are you expecting from some of these initiatives.
And when you think about the launch of the 30 year, what we guide towards as look at the performance, we've seen and the 5 year product, which we launched the re launched about 2 years ago and in terms of how that build liquidity.
Look on also the performance of the 2 year product, which we quickly built into the town over 10000 contracts a day. So those are good guidepost to see kind of what we expect for the 30 year there is going to be some.
So I'm waiting to see how the products interact with each other and the marketplace because remember the theory around these is about building out that full yield curve. So that people can trade at all different points of the Canadian yield curve, but it also will that'll also enabled trading strategies across where people may go short on 1 period and long and others. So how the product's interact that would still be what.
And we'll look to tell but I would use those earlier products as the guidepost with respect to Asia.
And if you look at our success on the European time zone, and kind of 5% to 6% of our trade flow going through that times on trade.
The Asian market has the potential.
To be even more impactful because we are bringing in net new traders that the arent there already and where Europeans. We had some of those that were already familiar with our marketplace. So.
When you benchmark other international organizations have done this already they see in terms of full global trading anywhere from 15% to 30% of their flow coming from those.
All of market trading hours and we are as I said at 6% today with just Europe. So that should give you an indication of where we're targeting for the upside.
Okay, great and from a macro backdrop with.
Bond yields.
Coming down in recent weeks, how do you expect.
Interest rate.
Derivative volumes to triangle for the foreseeable future.
And Thats always such a tough question for the Theres a lot of magic ball Magic 8 ball on that question.
Where we do see things and this is the importance of yield curve again is yields can be different at different points and so having that product breadth you can have products that are going to be.
The active to different market conditions, so we do see potential across the curve and the other piece I always want to keep reminding folks of is that coming out of COVID-19.
The good and the bad is that we are going to be seeing more long bond issuance over the long term governments raising a lot of debt to pay for the programs means we are going to see a substantial increase and the underlying cash market and that supports growth and the derivatives market as well. So that's something to keep in mind in terms of the long term growth potential.
Alright, and from an industry perspective, there has been.
The increasing talked around payment for order flow in and the United States.
So on this topic could you remind us of.
Of competitive dynamics on the trading.
Inter listed securities and and what percentage of.
The <unk> volumes do day represents.
Yeah, and Paul I'm going to look the Paul to help me in terms of where we are in terms of kind of cross border market share and it hasn't been materially different over the last number of years. Paul do you want to comment on that quickly and then all of the payments.
Yes, it's been around the 30% range sort of for several years and our share of net are lifted.
Yes, so the piece of all of that is.
Canada has not had of payment for order flow regime, I think we've got a you've got better market integrity, and a better market structure of that way, so anything and the U S that would tightened the rules around payment for order flow can only be of net benefit to us because of a lot of cases, we actually have better execution quality on those and are listed in Canada, but the flow doesn't come north.
Bound because of that payment for order flow regime. So.
I'm not saying that it is definitely a plus for us, but it's not a downside if the U S.
The reforms that regime.
Great. Thank you for your comments.
Thank you your net.
Next question for Brian the Delaware.
The <unk> Bank Brian. Please go ahead.
Great. Thanks, good morning folks.
Maybe John if I can ask you about your view of.
Both retail and capital formation coming into the second half and we are seeing a slowdown and retail trading activity of typical for for summer months.
And the markets and on the markets that we have that are more retail oriented like <unk> venture and alpha they're up 60% to 80%. So that engagement is still really strong and part of that is the engagement with the strong valuations there's good liquidity.
And that ties into the second piece of your question around the continued conditions for strong equity capital raising.
That is why we continue to see such strong raising sort of so many companies coming to market you've got the gist of it from my comments will be getting we've been on about 35 billion and the first half of this year of which $15 billion of that was tech tech and innovation companies. So that's a huge piece of the mix, but interested in and it's still broad based so you have got mining and industrial and <unk>.
<unk> as well that are making it up in terms of outlook and part of our outlook goes to what the final load is for the folks that are working on this every day and they are still running all of that.
It actually is a testament to the people and our and our capital formation group in terms of of how hard they are working and doing it all remotely.
So they are still seen a deep pipeline of new issues come to market Hasnt slowed down through the summer at all we anticipated that it might just because the folks that work for the industry may be tired, but it hasnt slowed down and all of that pipeline remains really strong obviously, no Brian I can't predict how long of Alaska only the the pipeline pipeline.
Remains very full.
And thats good color, it's impressive and then.
And maybe just.
Just quickly on the on the ESG services that you've been offering to your listed issuers that they look to improve their disclosure and accounting for ESG.
Talk about how that going are you seeing.
Very large surge and demand for it.
Of that and is that something that I know, it's really part of the lifting overall.
Value proposition, but is that something that you think you can begin charging for at some point.
With respect to what we're doing for the issuers I'd say at this stage and it is still early stage, what we're seeing the strong interest.
And the and the work now in terms of the marketing efforts between ourselves and IHS Markit, who is our partner and delivering the ESG reporting portal.
Now going to convert that into usage. So I think it's still I think we just launched this and made so it's still early days in terms of that rollout and the marketing of the product I do see that 1 and Brian has been part of the core service we provide the issuers.
They pay a premium to be on our markets. This is part of the way that we help.
And make that relationship more sticky and provide more value and also make it easier for more companies to go public so that ESG reporting isn't and an additional challenge of burden for them. So so I do see it and that piece of it's more about enabling more companies to go public larger issue of based on the market versus pricing for that service. The long term question there'll be.
And as you build more companies into it and we capture more data.
Is there is there a valuable market data opportunity that comes out of it and that's yet to be seen but that's where we would see more of the commercialization opportunity.
Okay, that's great color. Thank you.
Thank you ladies and gentlemen.
Mind, you if you have any questions. Please press star 1.
And with debt we have a following question for Mercy badge TD Bank. Please go ahead.
Thank you good morning.
Good morning, and I speak to you.
Yes exactly.
My first question was on the increase and Cts revenue and fees of 13% year over year.
I'm curious as to what drove the increase when the overall equity trading volumes were down 12% versus last year.
So theres a combination and Cvs. So it's not just the equity trading piece of you remember there's also the the fixed income trading the trade for trade activity. So overall.
Transaction or trades.
What drives the trading and clearing of the clearing revenue within Cvs and that actually continues to be up year over year.
Okay.
It makes sense and.
And receive its David I mean, 1 of the other ones is on account transfer online or the indication.
And did generate more revenue and this quarter.
We refer to the <unk> as the <unk>.
Okay.
Got it.
And my second question was just on books.
And I understand on the and the path.
Last year, you had flagged that and listening to as a noncore investment.
Just wondering if there then.
Given the strong revenue upticks over the.
And as it does that still the case or for any updates on that.
Directionally debt investments.
Yes, it's a great question and I wouldn't I would never say that it's non core where we're not on active manager of the business, we operate and there from a governance standpoint, and a leadership standpoint.
But we are not the control party and it.
But it is a good investment and what <unk> seen is as David said box being able to take advantage of that strong uptake in the U S options activity, they've also benefit from increasing market share. So.
And beyond just the market improving they've moved from I think 3 and change and market share to almost 5 so the team there is performing really well, we like what they're doing and we'll continue to explore and the near term of what more we can do with them. So that's the way I would think about it and it's I wouldn't say that it is non core at some of that has been more of a passive and.
Investment for us, but we are looking at the performance of it and seeing what more we can do with them.
Okay understood and.
Just the last question was on the refined oil project on.
On <unk>.
And I think you mentioned the last quarter, you had signed on the 1 global and broker dealer and this quarter you mentioned the 11 brokers using the product. So is it correct to say that you have signed on to and more brokers during this quarter and.
And if you can also provide any more color on the new brokers, who have signed on this quarter in terms of of.
For the global clients sort of the specific to 1 geography or any.
The sort of color would be appreciated.
And actually I think we're talking apples and oranges between the this period and all assets.
And it's 1 large brokerage house and we were talking to you in terms of actually of the number of actual broker subscribers that are using it because of the.
So we are still early days and it's still primarily 1 large partner on it they are global in nature. So we are looking at refined oil for multiple geographies with them and we all will be looking to bring on more broker partners onto it as we go as well as additional trader partners, but that's still early days in terms of building that liquidity on screen.
Understood. Thank you for your day.
Okay.
Thank you.
There are no further questions at this time Mr. Malcolmson you May proceed.
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Okay.