TMX Group Inc. (TSX:X) has slashed its equity trading fees for securities trading under $1 on TSX Venture Exchange and Toronto Stock Exchange, the company said Monday.

The changes represent on average an approximately 50% reduction in trading fees for these securities. The new fee structure will take effect on March 1, 2010, subject to regulatory approval.

“The changes announced today are intended to encourage higher trading volumes and liquidity, which will benefit traders, investors and listed issuers of lower-priced securities,” says Kevan Cowan, group head TMX Equities and president TSX Markets.

“Today’s announcement further strengthens our leadership in this space and will ultimately facilitate access to a broader capital pool for highly innovative and growth-oriented organizations,” Cowan adds.

The new fee structure announced today includes the elimination of the tiered pricing model that saw fees adjusted based on trader volumes and its replacement by a new, lower single fee schedule for securities trading under $1. This will benefit both active and passive traders in organizations of all sizes, TMX Group says.

Based on recent historical trading activity, patterns, product and customer mix, changes to the trading fee structure could reduce revenue by approximately $15 to $18 million on an annual basis (or approximately 3% of revenue for the 12 months ended September 30, 2009) if offsetting benefits, including increased volumes, are not realized, TMX Group forecasts.

IE