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TMX POV - Technology Continues to Drive Change in Canada’s Mutual Fund Industry

October 1, 2020

tmx.com

Even though much of the world continues to grapple with the fallout from the COVID-19 pandemic, the technology-driven disruption of many industries has continued unabated. In fact, the massive change created by working from home and social distancing has arguably accelerated digital transformation, pushing companies to look at technology investments to both serve customers better and improve the employee experience.

The mutual fund industry is no stranger to this reality, nor the innovation it enables. After all, Fundserv, an electronic platform for trading funds, traces its roots back to 1993. In the ensuing decades, the platform has served to eliminate cumbersome paper-based processes and increase accuracy and speed of business.

As the industry grew exponentially and the need for greater trading efficiency increased, asset management giant Invesco created the first platform-traded funds, or PTFs™ in 2015. The industry continued to evolve at a dramatic pace and continued to look for a better way to execute their funds while also having the visibility to service those assets.

In 2016, TMX Group launched the TSX NAVex® platform, to provide greater trading efficiency to investment dealers and allow discretionary advisors to bulk-trade their orders, much like exchange-traded funds or stocks. In addition, TSX NAVex delivers sales reporting for every sale and redemption, identifying the dealer, branch and advisor. TSX NAVex also lets users easily monitor short-term trading violations and the residency of beneficial owner positions.

Against this backdrop, it might feel appropriate to ask whether three different platforms are necessary to properly serve the fund industry and its stakeholders. I believe the answer is a resounding "yes." Greater competition drives more innovation, which in turn benefits the industry and its participants. In addition, fund products carry a significant degree of nuance that can make one platform more appealing than another from a manufacturer's perspective.

And if that rationale isn't enough, TSX NAVex just received a massive vote of confidence in its offering from Desjardins Group, which has agreed to become a premier partner and has launched 16 of its funds on the TSX NAVex platform.

TSX NAVex can deliver significant cost savings, efficiency and ease of trading, which is particularly attractive at a time when the industry grapples with profitability challenges and eroding margins.

TMX Group continues to push the envelope of technological change and innovation and I am excited to be part of this evolution.


Photo of Guillaume Légaré

Jackson Lin

Head of TSX NAVex Traded Funds and Mutual Funds
Toronto Stock Exchange
jackson.lin@tmx.com

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Jackson Lin is Head of TSX NAVex Traded Funds and Mutual Funds at Toronto Stock Exchange. For more information on the TSX NAVex platform, please email jackson.lin@tmx.com.

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This article is provided for information purposes only and is not intended to provide any type of advice. TMX Group and its affiliated companies do not endorse or recommend any specific securities in any industry, nor any mutual funds referenced in this article. This article is not an invitation to purchase securities listed on TSX Venture Exchange or Toronto Stock Exchange. Listing on TSX Venture Exchange or Toronto Stock Exchange does not guarantee the future performance of a security or an issuer.

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