All right, thank you. This, we're going to be wrapping up here. We save the best for last with the TMX Group and President of the Montreal Exchange, very fitting since we're sitting here in Montreal, as well as, I believe, Group Head of Trading, if I got that title correct. Correct me if I'm wrong. That's right. Luc Fortin, thank you for joining us here. My pleasure, and thank you very much to National Bank for having us here today. It's much appreciated, and obviously a great day with meeting investors, so much appreciate the forum and the opportunity to talk about our business. Excellent. Let's start with your background, I think, and your journey to CEO of the Montreal Exchange and the position you have with TMX. I think it would be interesting. Absolutely. Actually, January this year marked my 35th year in the financial services industry, and yes, I did start at five. Essentially, it's been a phenomenal journey. I spent probably 20, like it will be nine years at the end of this year that I've been with TMX Group, but I spent the lion's share of my career on the sell side. Started at TD Securities, went to HSBC, where I learned a lot about the globalization and what being a true global organization means. Unfortunately, you know, when I went there to basically build the business, we were shutting things down more than actually building. When I was approached to join TMX Group, we were at an inflection point where we really wanted to transform the organization, become a lot more client-centric, and be a lot more focused on actually delivering what it is that our clients want. I was brought in kind of as an agent of change. I ran the derivative business for practically 30 days, and after that, the then CEO came over and he said, "We're making some changes and you're becoming President and CEO, and in another month we're going to be giving you our natural gas exchange in Calgary to run." It has been an absolute privilege and joy to be running this business. We've shuffled portfolios around. I did run our data links business for a while, but right now what I have the privilege of overseeing is all of our public markets, including our inter-dealer broker, which is Shorecan, which is fixed income, and our post-trade entities, CDS and CDCC. The portfolio responsibilities that the team and I have to have the privilege of running the business is roughly sort of 44-45% of TMX's top line revenue. Yeah, and has been performing very well this year with what I'll call good volatility at this point. Good timing to have you here. Maybe for those of us less familiar, maybe talk about the Montreal Exchange, what it looks like today and how you see it evolving over the years to come. MX has been a pride and joy of the TMX Group from the get-go. Last year we celebrated our 150th anniversary, and everyone who's had the privilege of being involved in centuries-old organizations, you know that they go through all kinds of very interesting periods of time, wars and recessions and depressions and you name it. It is ironic that the challenges we face, it feels quite comfortable to be in a centuries-old organization because it always has to be led by innovation and technology. Those were really catalysts that have allowed MX to kind of stay very current and to be very modern. You look at some of the key pivots to become the first derivatives-only exchange globally, that happened less than a little bit more than a decade ago. Those key transformations that we've made have really allowed MX to continue thriving. It was a big bold move. This goes back to, I think, the years when Luc Fortin, who is now our Chair, former Vice Chair of National Bank, Luc was presiding over Montreal Exchange at the time when they made this challenging decision to say, "Hey, we're just going to focus on derivatives." The platform is really divided between equity options business, which represents probably 40% of our derivative revenue, and then we have a futures business, which is equity futures contracts, S&P/TSX 60 futures, and then we have a whole suite of derivative contracts that allow investors, global investors, to emulate exposure to fixed income. Short-term interest rate contracts, a two-year contract, a five, a ten, and a thirty, and that allows the street to sort of replicate. Now, where we're going in terms of future growth, we've basically taken Canada to the world over the course of the last several years, and now I think it will be taking bringing international products to our international audience is kind of one of the areas we'd love to see a little bit more growth come out of MX in the years to come. Okay. Maybe just since you're on that topic, I'll just ask the question. You extended trading hours a few years back. That's about 5% of the volume. Some of the adding international products, is this something that you expect is going to help drive that to increase that share of trading? I think the way we measured that, initially we said, "Oh, you know what, I think we'd love to be at about 15% of our EDV driven from our international clientele." The challenge that we face is that we know that Australians, for example, are significant players in our market, but they might not trade that market at its lowest point of liquidity, which is right in the middle of our night, right? If they need to do some transactions, they're there, but they do trade into our own hours. How do you actually relate that business is it's a bit of a challenge in terms of how we measure it, but I think that there's no reversing that trend. I mean, all futures and derivative platforms globally are open in some instances 24 hours. We're at 20 and a half. Where you're starting to see equity markets trend to, we've been there for years. I think it's such an important element to allow global clients to manage risk on their time zones when they're taking exposure to Canadian markets. We make sure that there's the right kind of liquidity in the time zone so that they can get the things done that they need done. We'd love to see ongoing growth, and I think we will be able to see more participation when we can actually bring unique products to cater Asia hours that are tailored for local clients and not necessarily just them trading Canadian fixed income or Canadian equity products. Right. Okay, bringing it back higher level a little bit. The TMX Group, the financial objectives expect the derivatives franchise to deliver high single or let's say high growth, one of businesses. So high single, low double-digit growth. Is that sustainable over the longer term, and what are some of those drivers that are going to get you to double-digit growth rate on revenues we're talking about? I think we've taken all the right steps in terms of working very closely with our clients, taking feedback from them in terms of what they felt was missing. Rebuilding the interest rate complex was a key element, and now the business is really, really thriving in terms of the growth that we've been able to deliver as a result of getting that whole rebuild accomplished. Creating new functionality in market structure, for example, to allow on Market On Close to be able to exercise an options position either on an ETF against the actual physical cash on the Market On Close. That type of functionality has led to a lot of growth. Obviously, the macroeconomic circumstances that we've been facing over the last couple of years, we're in a rate decrease environment right now trying to avoid sort of a hard landing, and the Bank of Canada has been quite active. The entire fixed income complex has exploded in terms of activity. We're tapping into new average daily volume records on both CORRA, all of our new contracts, twos, fives, and tens. There is a high, high degree of adoption of our product. Now, with some of the investors that are in this room, we had conversations today around, well, how do you measure sort of ongoing derivative growth? If you look at sort of what we call a liquidity ratio between how much your derivative turns over more than your cash, because derivative always leads cash, and it provides that immediate liquidity. If you look at sort of 10-year U.S. Treasuries versus T-note contracts, you're looking at sort of a five to one ratio. We're probably at three to three and a half. There is still room for us to continue growing. The options business is still very vibrant in Canada, but we've not seen the kind of euphoria that we've seen through sort of retail trading in the U.S. that is really unique globally. I genuinely believe that there's a lot of ongoing upside for the derivative business. The derivative industry as a whole, and in addition to all of the new products and services that we'll continue sort of curating and bringing to meet the demands of clients, leads me comfortably to believe that we'll be able to sort of meet the targets that we've committed to the board and our investors. Right. The TMX has acquired VettaFi Index Research. These are ETF-focused businesses. Is there an opportunity for the MX on the derivative side to leverage those acquisitions in ETFs? I think so. I think when you look at VettaFi, we certainly bought that asset because we believed we could grow it more than the existing ownership. When you look at the type of unique ecosystem that that brings and how it really helps drive sort of ETF issuance, there are a lot of interesting things that we could do with that asset, not only in Canada, but particularly in the US. If I look at, and I'm talking about that asset, there are certain things that it could do for us on the derivative side in terms of its index and benchmarking, right? The niche and the kind of index and benchmark that you could curate, we could do stuff around commodities. We're nowhere in the commodity space on MX. We could create new type of indices and have futures contract listed off of these types of indices. It's still very early. I mean, we've had that business for about a year. They're continuing to grow in terms of trying to diversify their asset base. Right now, it's largely focused on equity ETFs, but we've just bought the Credit Suisse High Yield Index that will, in addition to index research, those are bolt-ons that basically bring fixed income expertise into VettaFi that again could be used on a number of different fronts to diversify that business as well. Yeah, great. Something in that derivatives business that you've been working on for several years, I believe, is the secured general notes. Maybe you can talk about what's a secured general note? How does this help investors in their trading? Maybe more importantly for people here, how does it drive revenues for the MX? Firstly, secured general collateral notes were brought to bear at the outset of the elimination of BAX and BAs in Canada in general. When you look at the type of gaping hole that the disappearance of BAs, they were an incredible funding tool for a lot of the bank balance sheets to basically fund a lot of what's called their HQLA, so high quality liquid assets that sit on bank balance sheets. Now, with the elimination of BAs, the only thing to replace from an investor perspective is Government of Canada T-bills, one-month T-bills. The bank has basically tried to get some of these things out. What an issuer can do, National Bank Financial, a TD, an RBC, basically takes these HQLA assets and through another platform that we've basically developed, which is CCMS, that's kind of the plumbing. You basically present all these HQLA assets to TMX in the form of a repo, and we will issue a CUSIP for a single security. That single security can then be taken back and traded in the cash market for cash, and it could be traded in the OTC market, or it could choose to be cleared. In the event that there is a liquidity event, the SGC notes are acceptable at the Bank of Canada window. This is a very, very unique funding tool that we feel will help replace, I think it was, I do not want to misquote here on the number, but there are hundreds of billions of dollars of BAs that disappeared with the elimination of CDOR. We think that there's probably somewhere in the CAD 15 billion-CAD 30 billion of curation that we could actually create these SGC notes, and there's a lot of promise. The delivery of this has been slightly delayed because of the fact that Post-Trade Modernization has yet to be delivered for us, and there are some big dependencies in terms of being able to test, being able to onboard participants, and that's scheduled to go live end of April. We are definitely very excited about the prospect of what this does. It answers a lot of needs of gaping hole in money market portfolios across the country and across the world. I mean, you mentioned the CCMS, which is the Canadian Collateral Management Service, something that was developed, an initiative that you've been working on for years. Bank of Canada signed up as a customer on this collateral management system. You have the secured general notes. How do these tools and initiatives drive revenues for the MX or for TMX Group, I should say? I think the way to view this is that Canada suffered dramatically from having the lack of quality plumbing, and there's nothing sexy around how you move collateral around, how you move cash around. The issue was that there really wasn't that type of infrastructure, and just anyone who's worked on a fixed income desk will tell you it would take like 10, 15, 20 minutes to be writing any ticket around doing repos, very cumbersome. This is sort of the first tri-party tool that is being done in partnership with Clearstream in Canada. They bring the technology, we bring all of where the securities are sitting within CDS, and this allows to move significant amounts of collateral around. Some of you will be familiar with CFIF, the Canadian Fixed Income Forum, which was basically brought to bear to help with the transition from CDOR to CORRA. The bank, through that network, has actually recreated an entity called SIMPA. SIMPA is an entity that basically looks for efficiency in collateral management. Through that forum, what the Bank of Canada realized through feedback from the street is that their execution on their current monetary policy will have the ability to be much more profound and have the real type of impact, like the full impact of when the bank is either pulling liquidity out of the system or injecting liquidity in the system. CCMS will allow them to execute that a lot more efficiently. We are very pleased that they are supportive of this endeavor and that they are coming on the platform. In terms of ramp up on this, probably by the end of this year, early next, we probably will have 35-40 more participants kind of on the platform. Again, similarly to SGC, it's been slightly delayed because of PTM, but once PTM goes live, it'll be guns a-blazing to kind of get this thing live. Okay, so PTM post-trade modernization. Correct. Soon, I think, when it goes live. What are some of the other capabilities that this is bringing to the TMX? Obviously, there's more than just derivatives trading. This was an industry utility until Maple, and then we basically brought this within TMX and have been concentrating on modernizing this. It's not sexy, right? But this is such an essential tool. It looks after the settlement of every fixed income and equity security that trades on a daily basis. It allows for all of the critical infrastructure that is required for us to operate financial markets. It was running on mainframes that you could not get replacement parts for. This was not the way to actually build on a solid foundation. The technology needed to be modernized. We worked with industry to try to do this as least disruptively as possible. It took a while. We had to pivot throughout this journey, but we're coming to the platform is operational. It's been deeply tested. It's ready to roll. Regulators are looking through all of the documentation, all of the filings to make sure that everything is ready to roll. April 28th is the date that we look to be going live with this new platform. Now, what this new modern technology allows us to do is to be a lot more creative. As you're seeing, we kind of jumped the gun with SGC and CCMS. These are things that get enabled by having that new modern platform. When you have modern platforms, you could be a lot more current in terms of the innovation. I think that will feed into another big strategy growth pillar for TMX, which is post-trade as a growth engine. Historically, when you looked at post-trade, it was essentially the byproduct of trading. You'd create a new equity product, it would clear, there'd be revenue there. Derivatives, same thing. Now you've got growth in repo, you've got growth in these SGC notes, you've got growth opportunities in CCMS. There are all kinds of other things that we're investigating in terms of playing roles around private markets and how you could help sort of that ecosystem from a post-trade perspective. A lot of different innovative ideas will drive future growth for TMX and taking these below sort of corporate growth businesses and propelling them to sort of higher growth in the portfolio of businesses that we have the privilege of overseeing. Yeah, and I think that's the big takeaway here is that derivatives on its own, trading volumes, double digit growth, we see that. It's a little bit more under the radar, maybe a little more complex, harder to see, but the bottom line is taking it from like a low to market growth to something that is higher growth. And so that's the upside that we should see over the next year or two years. Absolutely. You'll start seeing this innovation start kicking in. Again, when you see the Bank of Canada piling on this adoption of these platforms, it's because, again, this was curated and built for clients. Yeah. Okay, you have said it is less sexy. Maybe something that is more sexy might be the US expansion plans. What are your goals there and what gives you confidence that you will have success entering the U.S. market with a trading platform? We looked at the U.S. market and you can't greenfield the US market. You need to basically look at this and take a very strategic look. When you look at the market structure of the U.S. market, we spent three years ago, we went into the U.S. market looking at acquiring venues. It was clear that it was not the time to be shopping because every venue had a sort of crypto sidecard associated with it that had ridiculous multiples that would have never been palatable to the investor base. We paused on that. Strategically, if you go into the exchange space, you can be less creative. The SEC is incredibly prescriptive in terms of what they expect of exchanges. It's largely dominated by the incumbents in the U.S. market. It's all about paying out for market share every quarter. The U.S. market is actually very interesting in the sense that 50% is actually less than 50% is actually happening on exchange, but more than 50% is actually happening off exchange. We happen to be a very good exchange operator. We love to be innovative. We have got more flexibility in Canada because of the regulatory regime in which we operate. What could we bring to the U.S.? The focus on LFX U.S. was we found a very interesting niche, which comprises probably of 10% of the U.S. market structure, which is focused on quality of execution. We hired talent. We had curated a whole list of different ideas on market structure that we could bring. Worked very, very closely with our client base and really narrowed things down to basically deliver something that would be ideally suited to the demands of our clientele. We launched in February. The data is on our website. It's exceeded our expectations from day one in terms of, A, the type of messages that we're seeing, the type of volume, and the type of activity. For us, just to give a sense of the kind of growth, when you look at the US market, it's multiple times the size of Canada. A very tiny percentage of market share can help replicate a very significant amount of our total Canadian equity revenue business. It's a very interesting approach for us to kind of target that part of the market. From our go live, from the ideation stage to go live is the shortest the SEC has ever approved anything. It was less than 18 months. I think it goes to the credit of the team that did that. Heidi Fischer was brought in and she's worked very closely with the rest of her team to really develop this platform. Just some follow-ups on that response. You said that the market you're targeting is about 10% of all U.S. trading. Within that 10%, is there anyone else doing something similar to what LFX is bringing? How do you differentiate to win more of that 10% market share? First of all, in the ATS space, you cannot have more than 3%. You need to change, become an exchange. That would, the market model that we're using would not work. We are going to have to add different venues to be able to cater to that. There is competition. I think the beauty of that competition is that, like I said, we're centuries-old exchange operators. We know how to build technology. We know how to work the functionality. The bottom line is it's simple to use our platform. It has been worked in partnership with them in terms of understanding what type of functionality would make their lives easier, which made it such that we had a greater number of participants that were there day one, a number of participants that are queuing up because they needed to see you go live before they did it. Secondly, what are the outcomes of this? What is going to be interesting is as our business grows, the data that this generates in terms of the quality of the execution, the markouts, that data will help drive even more business to that platform. We think we have a very interesting competitive edge because the others are very complex to operate and not as easy to operate. Okay. Maybe just to wrap up on the last minute here, still on this subject, what does success look like for the TMX in the U.S.? Is it just getting to that 3% threshold? Is it adding more venues? What does success look like, maybe short and longer term? I think the vision I'd like to share with investors and with our audience and with you is imagine an ecosystem in the U.S. that resembles what it is that we have in Canada. There's no reason that at the end of the day, we can't compete on a global scale. These participants, some of them are actually competing with us in Canada. We're dealing with the same clients in every global jurisdiction. The clients want to partner with us because they find that we're very attentive to their needs and we provide products and services that they're looking for. We feel that we have a genuine right to play. We have a number of assets. We own BOX, which we didn't talk about. We've got VettaFi, which is an incredible asset. Now we've got LFX. is a lot more that we could be building in terms of other things to kind of fill out that missing complexity to be able to drive the same kind of value of products and services to the U.S., to our U.S. clients that we are doing here in Canada and that eventually we will do in other jurisdictions globally as well. That is kind of the longer-term vision in terms of where we are going with this. Excellent. Yeah, sounds sexy. I think we're out of time now, so we'll leave it there. Luc, thanks very much for joining us. It's a pleasure. To everybody in person and online, thanks for making this another very successful Canadian Financial Services Conference with National Bank. Thanks for the invitation. Thanks very much.