Finance Minister Jim Flaherty is encouraging TSX Group Inc. and Montreal Exchange Inc. to continue negotiating a potential merger between the two market operators.

“I’m not endorsing anything … there are pressures to acquire exchanges around the world, we’ve seen lots of that activity,” Flaherty told a news conference following a speech at the Canadian Annual Derivatives Conference in Montreal on Monday night.

“Everyone knows there has been discussions between the Montreal Exchange and the Toronto Exchange and they are to be encouraged.”

Flaherty touched on a number of other issues at the news conference including the robust Canadian dollar and the issue of a single securities regulator Canada.

Flaherty said Canada is the only industrialized country without a common securities regulator and that something needs to change in the current system.

Flaherty said he’s moving ahead with the creation of an expert panel to recommend how to move forward on the issue.

Most provinces have agreed to co-ordinate and harmonize securities laws across the country through the so-called passport system.

Ontario has declined, arguing the changes don’t go far enough.

Flaherty said the government is mindful of the various challenges it faces with the rising Canadian dollar.

The loonie hit parity with the U.S. dollar for the first time in almost 31 years last Thursday and has been trading in a similar range since then.

Flaherty’s speech is to be followed by one from Bank of Canada governor David Dodge on Tuesday in Vancouver on the theme “Turbulence in Credit Markets: Causes, Effects and Lessons to Be Learned.”