TSX Group Inc. and the DeGroote School of Business at McMaster University in Hamilton, Ont., have each donated $500,000 to establish a new research centre for the study of the capital markets industry.

The principal goals of the DeGroote-TSX Research Centre in Capital Markets — which will open in the 2006-2007 academic year and enjoy a permanent, $1-million endowment to fund research — will include extending and broadening the study of compliance, market surveillance and risk management.

“There has been a lot of academic research on portfolio management and corporate finance, but relatively little on market mechanics and surveillance,” says Paul Bates, dean of the DeGroote School of Business and a veteran of the financial services industry.

Bates says those who work in compliance and surveillance often get their training on the job. He hopes that work at the new research centre will eventually develop into executive programs in those areas.

The TSX Group won’t have any proprietary ownership of research coming out of the DeGroote-TSX Research Centre, but the close relationship will pay the firm dividends, says TSX Group CEO Richard Nesbitt.

“It will help us develop new products and services and increase our value proposition,” he says. “A lot of the innovation in the capital markets over recent years has not come from the Street; it’s come from researchers.”

TSX Group’s donation is part of a wider strategy the firm is pursuing under Nesbitt to support Canadian business schools involved in capital markets research.

National focus

“There is a lot research done on capital markets in the U.S., but little in Canada,” Nesbitt says. “This donation is our largest gift to date. But we are also working with other schools. We want to have a national focus.”

Last year, TSX Group gave $250,000 to business school HEC Montreal and Concordia University to support the launch of their joint Institute for Governance of Private and Public Organizations. It also gave $150,000 to the Richard Ivey School of Business at the University of Western Ontario in London. Ont., for the school’s Quantum Shift program for entrepreneurs.

Bates says the research centre will boost DeGroote’s reputation in Canada’s financial community. “We’re not as Bay Street-centric as Rotman School of Management at the University of Toronto and Schulich School of Business at York University, but this gift will help us strengthen our connection to Bay Street and the capital markets,” Bates says.

DeGroote has an enrolment of about 3,000 students, and offers a full undergraduate program, post-graduate programs leading to MBAs or doctorates, and co-operative programs. IE