London Stock Exchange Group and TMX Group Inc. have cemented their recently announced strategic partnership, with TMX agreeing to take a 19.9% stake in EDX London Ltd., the operator of the Toronto Stock Exchange said Thursday.

EDX London is the London Stock Exchange’s equity derivatives business. London Stock Exchange will retain a 80.1% stake in the business.

Starting later this year, the EDX London markets will be migrated to the SOLA Trading platform, a leading derivatives trading technology developed by TMX’s Montreal Exchange, which EDX London will use under licence. Additionally, the two groups will work together to develop EDX London.

“Acquiring this equity position in EDX London opens an exciting new door for us to participate in the growth and development of the European derivatives market, which adds a new geographic element to TMX’s diversification strategy,” says Thomas Kloet, TMX CEO.

TMX acquired its stake for a total consideration of £4.35 million ($7.7 million), invested in cash into EDX London.

For the year to March 31, 2008, EDX London had gross assets of approximately £17.7 million and profit before tax of approximately £5.1 million.

Created in 2003, EDX London provides the international investor community a gateway to Scandinavian and Russian International Order Book derivatives. The market has over 80 member firms, including the leading European and global investment banks and derivatives firms.

IE