The wheels have turned for months on the proposed takeover of the TMX by a gaggle of Canadian financial institutions. This was to be expected, as was the feined concern about the deal being anti-competitive once Alpha is merged into the TMX. According to my morning paper, the Competition Bureau has serious concerns about the deal.
May I present Exhibit One for the benefit of the Bureau’s analysis:
There are these nice folks at a firm called Questrade who offer stock trades for $4.95 per. That’s what you’d pay for a Vanilla Shot Venti Latte at the Starbucks across the street from Industry Canada’s HQ in Ottawa. When I did my first trade in Dome Petroelum back in the late 70s, I suspect I paid about $60 or so for the “pleasure” via my Dad’s broker. Find me a comparable financial services fee that has fallen further in 30 years.
Questrade has won a bunch of awards for service and execution, is employee-owned (with some venture funding as well), and seems to keep up with the times. Open an account with $250k, and they’ll even give you an iPad.
Should the TMX and Alpha merge, is the concern that Questrade will no longer be able to make an acceptable profit margin on their $4.95 equity trades? And that will push up prices? My advice is to focus on that element of the many issues that are obstensibly presented by the proposed deal. I can’t choose who supplies my Cable TV, the natural gas to heat our home, nor my electricity…. The CDS is a utility and can be regulated accordingly. The fact that it involves stock certs and not natural gas is irrelevant to the discussion.
So long as individual investors can still trade for less than $5, and firms like Questrade can profitably remain in business, there is nothing that I’ve seen so far that needs a heavy hand when it comes to the Maple Group’s TMX bid.
MRM
