TMX Group Limited

ANNUAL INFORMATION FORM

March 25, 2021

		Management’s
Annual	Financial	Discussion
Information Form	Statements1	and Analysis
CORPORATE STRUCTURE ................................................................. 1
Name, Incorporation and Address .................................................... 1
Intercorporate Relationships ............................................................ 1
GENERAL DEVELOPMENT OF THE BUSINESS ..................................... 2.......................... Notes 3, 4, 6 ......................... 2-26
NARRATIVE DESCRIPTION OF THE BUSINESS .................................... 3
Our Business Operations .................................................................. 3……………Notes	3, 4, 5, 6, 12, 17….27-48, 51-59, 62-65, 73-76
Regulatory Matters ........................................................................... 3 ................................................................. 20, 22, 46-48
Regulatory Developments ................................................................ 11 ........................................................................ 11
Social Policies .................................................................................... 11
Risk Factors ....................................................................................... 12 ..................................................................... 60-81
DESCRIPTION OF SHARE CAPITAL OF TMX GROUP ........................... 12............................Note 26
Common Shares ................................................................................ 12
Preference Shares ............................................................................. 12
Restrictions on Ownership of Our Voting Shares .............................. 13
Share Ownership Restrictions in Our Articles ................................... 13
Restrictions on Ownership of Subsidiaries........................................ 13
Ratings .............................................................................................. 14
DIVIDENDS....................................................................................... 15............................Note 28 ...................... 39, 41-42, 53
MARKET FOR SECURITIES ................................................................. 16
Prior Sales ......................................................................................... 16 ........................... Notes 12 ........................... 43-48
DIRECTORS AND OFFICERS ............................................................... 17
Directors ........................................................................................... 17
Committees of the TMX Group Board .............................................. 18
Executive Officers ............................................................................. 25
Shareholdings of Directors and Executive Officers ........................... 25
Corporate Cease Trade Orders or Bankruptcies ............................... 25
Penalties or Sanctions ....................................................................... 26
Conflicts of Interest .......................................................................... 26
Employees ........................................................................................ 27 ........................................................................ 35
INTEREST OF MANAGEMENT AND OTHERS
IN MATERIAL TRANSACTIONS ...................................................... 27
TRANSFER AGENT AND REGISTRAR .................................................. 27
MATERIAL CONTRACTS .................................................................... 27............................Note 12 ............................ 43-46
EXPERTS .......................................................................................... 28
ADDITIONAL INFORMATION ............................................................ 28
CAUTION REGARDING FORWARD-LOOKING INFORMATION ............ 29
TRADEMARKS .................................................................................. 31
APPENDIX A – INTERCORPORATE RELATIONSHIPS ........................... A-I
APPENDIX B – RATINGS AND TRENDS .............................................. B-I
APPENDIX C – FINANCE & AUDIT COMMITTEE CHARTER .................. C-I

1 As indicated, parts of TMX Group Limited’s audited annual consolidated financial statements for the year ended December 31, 2020 (“2020 Annual Financial Statements”) and management’s discussion & analysis for the year ended December 31, 2020 (“2020 Annual MD&A”) are incorporated by reference into this annual information form (“AIF”). The 2020 Annual Financial Statements and the 2020 Annual MD&A are available on SEDAR at www.sedar.com or on our website at www.tmx.com.

Unless otherwise noted, the information contained in this annual information form is given as at February 26, 2021, and all dollar amounts are expressed in Canadian dollars, unless otherwise indicated.

CORPORATE STRUCTURE

Name, Incorporation and Address

TMX Group Limited (referred to herein, with its consolidated subsidiaries as the context requires, as “TMX Group”, “we”, or “us”) was incorporated under the Business Corporations Act (Ontario) (“OBCA”) on April 28, 2011 as Maple Group Acquisition Corporation. Through a two-step acquisition completed on September 14, 2012[2] , TMX Group acquired all of the issued and outstanding common shares of TMX Group Inc. (a publicly listed company at the time) while preserving a stock exchange and clearing group focused on the Canadian capital markets.

On August 1, 2012, we completed the acquisition of The Canadian Depository for Securities Limited (“CDS”) and its subsidiaries and the acquisition of Alpha Trading Systems Inc. and its subsidiaries. Alpha Trading Systems Inc. and its subsidiaries have subsequently reorganized into Alpha Exchange Inc.

On August 10, 2012, we amended our articles of incorporation to change our legal name to “TMX Group Limited / Groupe TMX Limitée”.

On December 13, 2017, TMX Group Inc. amalgamated with TMX Group Limited under the OBCA as part of a broader initiative to simplify our corporate structure by reducing the number of legal entities within our enterprise.

On December 14, 2017, we completed the acquisition of London-based Trayport Holdings Limited, its subsidiaries and its U.S.-based affiliate, Trayport Inc. (collectively, “Trayport”).

On May 15, 2019, Trayport completed the acquisition of VisoTech Softwareentwicklungsges.m.b.H (referred to herein as “VisoTech”).

Our head and registered office is located at 300 - 100 Adelaide Street West, Toronto, Ontario, M5H 1S3. We also operate offices across North America (Montréal, Calgary, Vancouver and New York), as well as in key international markets including London and Singapore. Our website is www.tmx.com. We are not incorporating information contained on our website in this AIF.

Intercorporate Relationships

Information about the intercorporate relationships among TMX Group and its principal subsidiaries is provided in Appendix A of this AIF.

2 On June 13, 2011, we made a formal offer, as subsequently varied and extended (the “Maple Offer”), to purchase a minimum of 70% to a maximum of 80% of the outstanding common shares of TMX Group Inc. for $50.00 in cash per TMX Group Inc. share. The Maple Offer was part of an integrated acquisition transaction to acquire 100% of TMX Group Inc.’s outstanding common shares (the “Maple Transaction”) comprising the first step Maple Offer followed by the second step Subsequent Arrangement (defined below). On September 14, 2012, TMX Group exchanged the common shares of TMX Group Inc. (other than those held by TMX Group) for common shares of TMX Group on a one-for-one basis pursuant to a court-approved and shareholder-approved plan of arrangement (the “Subsequent Arrangement”). TMX Group Inc. became a wholly owned subsidiary of TMX Group under the Subsequent Arrangement.

GENERAL DEVELOPMENT OF THE BUSINESS[3]

TMX Group operates global markets, and builds digital communities and analytics solutions that facilitate the funding, growth and success of businesses, traders and investors. TMX Group’s key subsidiaries operate cash and derivatives markets and clearinghouses for multiple asset classes including equities, and fixed income. Toronto Stock Exchange, TSX Venture Exchange, Alpha Exchange Inc., CDS, Montréal Exchange Inc. (“MX” or “Montréal Exchange”), Canadian Derivatives Clearing Corporation (“CDCC”), Trayport, VisoTech and other TMX Group companies provide listing markets, trading markets, clearing facilities, depository services, technology solutions, data products and other services to the global financial community.

In 2019, Trayport completed the acquisition of VisoTech. VisoTech provides advanced algorithmic trading solutions to customers in the European spot power and natural gas markets, enabling clients to use VisoTech’s pre-defined algorithms to develop their own customized trading strategies. These capabilities have been integrated with Trayport’s core trading screen, Joule, allowing traders to view and control algorithms within the trading screen and enabling Trayport to address the increasing market demand for intraday trading of energy products as the shift to renewable generation continues.

On August 17, 2020, we announced the appointment of John McKenzie as Chief Executive Officer of TMX Group. Following the retirement of former Chief Executive Officer Lou Eccleston on January 10, 2020, Mr. McKenzie served as interim Chief Executive Officer in addition to his role as Chief Financial Officer until his appointment as Chief Executive Officer. On August 17, 2020, Frank Di Liso, Vice President, Corporate Finance and Administration, was named Interim Chief Financial Officer until a successor to John McKenzie is appointed.

In September 2020, we announced an agreement to acquire AST Investor Services Inc. (Canada), and its subsidiary AST Trust Company (Canada) (collectively, “AST Canada”), a provider of transfer agency, corporate trust and related services to Canadian public and private companies. The transaction is expected to close within 12 months from the date of signing the agreement (being September 25, 2020), subject to receipt of regulatory approvals.[4]

We have organized our business into the following principal areas: Capital Formation; Equities and Fixed Income Trading and Clearing; Derivatives Trading and Clearing; and Global Solutions, Insights and Analytics (which includes TMX Datalinx (information services), Co-location Services and Trayport (including VisoTech)).

A description of TMX Group’s operating segments and information on our mission, initiatives, vision, corporate strategy, regulatory changes impacting our businesses, market conditions, and the impact certain macroeconomic factors may have on our business is located in the “ Mission, Client First Vision, Sustainable Growth and Financial Objectives ”, “ Our Response to COVID-19 Pandemic ”, “ Initiatives and Accomplishments ”, “ Regulatory Changes ”, “ Market Conditions and Outlook ” and “ Our Business ”

3 The “ General Development of the Business ” section contains certain forward-looking information. Please refer to “ Caution Regarding ForwardLooking Information ” on pages 29 to 31 of this AIF for a discussion of assumptions, risks and uncertainties related to such statements.

4 Information regarding the transaction is set out in the “ Initiatives and Accomplishments – Capital Formation – AST Canada transaction ” section on pages 5 to 6 of our 2020 Annual MD&A and in Note 3 of the 2020 Annual Financial Statements, which are incorporated by reference into this AIF.

sections on pages 2 to 4, 4 to 5, 5 to 11, 11, 12, and 13 to 26 of our 2020 Annual MD&A, and Notes 3, 4 and 6 of our 2020 Annual Financial Statements, which are incorporated by reference into this AIF.

NARRATIVE DESCRIPTION OF THE BUSINESS[5]

Our Business Operations

A description of the operations, revenues and results of operations of our Capital Formation, Equities and Fixed Income Trading and Clearing, Derivatives Trading and Clearing, and Global Solutions, Insights and Analytics operating segments, including a description of our products and services, business strategies, pricing, competition and fee regulation, as applicable, can be found in the “ Our Business ”, “ Results of Operations ”, “ Liquidity and Capital Resources ”, “ Critical Accounting Estimates ”, “ Select Annual Financial Information ” , “ Quarterly Financial Information ”, “ Enterprise Risk Management – Competition Risk ” and “ Enterprise Risk Management – Legal & Regulatory Risk ” sections on pages 13 to 26, 27 to 41, 41 to 48, 51 to 52, 53 to 54, 55 to 59, 62 to 65, and 73 to 76 of our 2020 Annual MD&A and in Notes 3, 4, 5, 6, 12 and 17 of our 2020 Annual Financial Statements, which are incorporated by reference into this AIF.

Regulatory Matters

Different organizations regulate or monitor participants in the Canadian capital markets including issuers, brokerage firms, exchanges, alternative trading systems (“ATSs”), clearing houses and inter-dealer brokers. Securities and other regulators regulate the activities of our marketplaces and clearing houses. Self-regulatory authorities, such as the Investment Industry Regulatory Organization of Canada (“IIROC”), regulate the activities of brokerage firms and their capital requirements, as well as their business and trading conduct. IIROC is the self-regulatory organization (“SRO”) that provides regulation services to Toronto Stock Exchange, TSX Venture Exchange and Alpha Exchange Inc., monitoring and enforcing compliance with universal market integrity rules.

Toronto Stock Exchange and TSX Venture Exchange also establish and maintain listed issuer standards to ensure quality marketplaces and investor confidence. Each of Toronto Stock Exchange and TSX Venture Exchange enforces compliance with those standards through the exchange’s powers to halt trading in a security or to suspend or delist a security.

Designation, Recognition and Regulation of Exchanges, Clearing Houses, and Transfer Agency and Corporate Trust Business

Each of TSX Inc. (which operates Toronto Stock Exchange), TSX Venture Exchange Inc. (which operates TSX Venture Exchange) and TMX Group is regulated as an exchange in Canada. TMX Group is also regulated as a clearing house in Québec, and TMX Group is subject to certain terms and conditions of its affiliates’ regulatory framework as set out below. TSX Inc. is also regulated as an information processor by the Autorité des marchés financiers (Québec) (the “AMF”), the Ontario Securities Commission (the “OSC”), the Financial and Consumer Affairs Authority (Saskatchewan) and the British Columbia Securities Commission (the “BCSC”) and operates as an information processor in accordance with a determination made by the Canadian Securities Administrators (“CSA”) Chairs. Alpha Exchange Inc. (which operates TSX Alpha Exchange) is regulated as an exchange in Canada; however, it does not carry on any listing activity.

5 The “ Narrative Description of the Business ” section contains certain forward-looking information. Please refer to “ Caution Regarding ForwardLooking Information ” on pages 29 to 31 of this AIF for a discussion of assumptions, risks and uncertainties related to such statements.

In Canada, an exchange can regulate its markets and its participants and enforce its requirements either directly or through a regulation services provider.

Montréal Exchange is regulated as an exchange and a SRO in Canada. MX is registered as a foreign board of trade in the U.S. with the U.S. Commodity Futures Trading Commission (“CFTC”). In the United Kingdom, the Financial Conduct Authority has declared MX to be a “Recognised Overseas Investment Exchange”. In France, the Autorité des marchés financiers (France) recognized MX as a recognized foreign market. In the Netherlands, the Dutch Authority for the Financial Markets has granted MX a Dispensation relating to the licensing requirement to manage and operate a regulated market. MX may also undertake certain activities in Israel subject to the conditions listed in a no-action letter issued by the Israel Securities Authority.

CDS Clearing and Depository Services Inc. (“CDS Clearing”) and CDCC have been deemed, through a notice issued jointly by the Bank of Canada (“BOC”), the OSC, the AMF, the Alberta Securities Commission (the “ASC”), the BCSC and the Manitoba Securities Commission, to be qualifying central counterparties under the standard on the capital treatment of certain bank exposures to central counterparties developed by the Basel Committee on Banking Supervision.

Both CDSX, the multilateral clearing and settlement system operated by CDS Clearing, and Canadian Derivatives Clearing Service, operated by CDCC, have been designated by the BOC as being of systemic importance under the Payment Clearing and Settlement Act (Canada). Under such designation, the BOC has broad powers relating to the regulation and oversight of CDS Clearing and CDCC. For example, any significant changes to governance, structure, or CDS Clearing’s or CDCC’s relationship to marketplace participants are subject to the prior review and approval by the BOC.

CDCC is regulated as a clearing house and clearing agency in Canada. CDCC must abide by the terms of recognition orders issued by the AMF, the BCSC and the OSC and a regulatory oversight agreement with the BOC. CDCC is also subject to regulatory requirements of the U.S. Securities and Exchange Commission (the “SEC”) and various U.S. state securities regulators. CDCC is also recognized by the European Securities and Markets Authority as a foreign clearing house under the European Market Infrastructure Regulation and the Bank of England has placed CDCC on the list of third-country CCPs that are taken to be eligible for temporary deemed recognition in the UK by virtue of the Temporary Recognition Regime.

CDS and CDS Clearing are also regulated as clearing houses or clearing agencies in Canada and must abide by the terms of recognition orders issued by the AMF, the BCSC and the OSC. CDS and CDS Clearing are exempt from recognition by order of the ASC, and are subject to a regulatory oversight agreement with the BOC.

Shorcan Brokers Limited (“Shorcan”) is a fixed income inter-dealer broker which provides facilities for matching orders for Canadian federal, provincial, corporate and mortgage bonds and treasury bills and derivatives for anonymous or name-give-up buyers and sellers in the secondary market. Shorcan is a registrant under the category of “exempt market dealer” and has been approved by IIROC to act as an Inter-Dealer Bond Broker. Shorcan is also registered as an introducing broker with the National Futures Association, which enforces CFTC reporting requirements for its members under the U.S. Commodity Exchange Act .

In Canada, TSX Trust Company (“TSX Trust”) is a federal trust company regulated by the Office of the Superintendent of Financial Institutions and is licensed to operate as a trust company in all provinces and

territories in Canada. In the U.S, TSX Trust is registered with and has reporting obligations to the SEC as a transfer agent pursuant to the Securities Exchange Act of 1934 .

An exchange or clearing house operating in Canada must be recognized in certain jurisdictions under applicable legislation. In some circumstances, an exchange or clearing house may obtain an exemption from this requirement. The Ontario, Québec, Alberta and British Columbia securities regulatory authorities have issued recognition or exemption orders and oversee TMX Group and the operations of Toronto Stock Exchange, TSX Venture Exchange, Alpha Exchange Inc., MX, CDCC, CDS and CDS Clearing. The OSC is the lead regulator for TSX Inc. and Alpha Exchange Inc. TMX Group operates under recognition orders granted by the AMF and the OSC. The ASC and BCSC are the joint lead regulators for TSX Venture Exchange Inc. The AMF is the lead regulator for MX. CDCC, CDS and CDS Clearing operate under recognition orders from the OSC, the AMF and the BCSC.

Exchange and clearing agency regulators focus on, and review and approve, among other things, the listing or eligibility standards and trading or clearing activities (embodied in the rules of the exchange or the clearing house or clearing agency). Generally, an exchange’s or clearing agency’s regulator(s) must approve any new standards or rules or changes to existing rules. In some instances, new rules or changes to existing rules must be published for a public comment period as part of the rule approval process.

Under the Derivatives Act (Québec), new rules pertaining to market activities or new products or rule changes with respect to MX and CDCC, must be submitted to the AMF in accordance with the selfcertification process. Significant rule changes must also be published for a public comment period before self-certification in Québec. There is a similar public comment period required under the OSC recognition order for CDCC.

The lead regulator or recognizing regulator, as applicable, also has the general power to make any decision in respect of the exchange, clearing house or clearing agency that it deems necessary in the public interest, and can review any direction, decision, order or ruling of an exchange or clearing agency at the request of the regulator’s executive director, or equivalent position, or any person directly affected by the direction, decision, order or ruling.

Terms and Conditions of TMX Group’s and its Subsidiaries’ Recognition Orders

The recognition orders (as amended) of each of TMX Group, TSX Inc., TSX Venture Exchange Inc., Alpha Exchange Inc., CDCC, CDS and CDS Clearing (collectively, the “Recognition Orders”, and individually, a “Recognition Order”) provide the terms under which the OSC, AMF, BCSC and ASC, respectively, permit TMX Group to operate a combined exchange and clearing group. The Recognition Orders impose, among other things, governance, conflict of interest management, financial viability, resource and other operational requirements and reporting obligations, some of which are outlined below. The Recognition Orders also require that TMX Group and certain of its regulated subsidiaries conduct their business and operations in a manner that is consistent with the public interest. In addition, TMX Group is required to do everything within its control to cause each of TSX Inc. and Alpha Exchange Inc. to carry out its activities as an exchange in compliance with applicable securities laws. TMX Group and TSX Inc. have each provided undertakings to the ASC and the BCSC (together, the “ASC and BCSC Undertakings”) in which they represent that, among other things, they will ensure that TSX Venture Exchange Inc. complies with the terms of its Recognition Orders.

Composition of the Boards of Directors of TMX Group Limited, TSX Inc., TSX Venture Exchange Inc. and Montréal Exchange Inc.

In addition to corporate and securities law requirements, securities regulators require TMX Group to comply with a myriad of governance requirements. Pursuant to the ASC and BCSC Undertakings, the boards of directors of TMX Group, TSX Inc. and TSX Venture Exchange Inc. must be identical and under the AMF Recognition Order for MX the board of directors of Montréal Exchange Inc. must be identical to that of TMX Group.

Under the Recognition Orders of the OSC, the AMF, the ASC and the BCSC, as applicable, the boards of directors of TMX Group, TSX Inc., TSX Venture Exchange Inc. and Montréal Exchange Inc. are subject to the following compositional requirements:

at least 50% of the directors (including the chair of the board) must be “independent” within the meaning of s. 1.4 of National Instrument 52-110 - Audit Committees (“NI 52-110”), provided however, that a person is not independent if the person is: (i) a partner, director, officer or employee of a marketplace participant of a marketplace owned or operated by TMX Group or TMX Group’s affiliated entities (as such term is defined in National Instrument 21-101 - Marketplace Operation (“NI 21-101”)) (a “TMX Group Marketplace”) or an associate of such individual, or (ii) a partner, director, officer or employee of an affiliate of a marketplace participant of a TMX Group Marketplace who is responsible for or is actively or significantly engaged in the day-to-day operations of that participant (any such director is referred to herein as “Independent”);
one director must be drawn from the Canadian independent investment dealer community (excluding investment dealers which are affiliates of Canadian Schedule I banks under the Bank Act );
at least 25% of the directors must be residents of Québec;
at least 25% of the directors must possess expertise in derivatives; and
at least 25% of the directors must have currently relevant expertise in the Canadian public venture capital markets.

Restrictions on Plans and Practices imposed under the Recognition Orders

The Recognition Orders of the OSC, the ASC and the BCSC provide for a variety of restrictions on our ability to engage in certain practices, some of which are outlined below.

Under these Recognition Orders, no TMX Group Marketplace[6] may, through any fee schedule, any fee model or any contract, agreement or other arrangement (collectively referred to herein as “fee arrangements”) with any marketplace participant (as defined in NI 21-101) or any other person or company, provide any discount, rebate, allowance, price concession or other similar arrangement (collectively referred to herein as “price reductions”) that is accessible, only to (whether as designed or by implication) a particular market participant or any other particular person or company or a price

6 In this section, the term TMX Group Marketplace does not include Montréal Exchange.

reduction for any service or product offered by the TMX Group Marketplace that is conditional upon the requirement to have a TMX Group Marketplace be set as the default or first marketplace a marketplace participant routes to or the router of a TMX Group Marketplace being used as the marketplace participant’s primary router. The Recognition Order of the OSC also requires TMX Group to ensure that any of its affiliated entities do not, through any fee arrangement with any marketplace participant or any other person or company, engage in the foregoing practices.

In addition, no TMX Group Marketplace may,

through any fee agreement with any marketplace participant or any other person or company, provide any price reduction that is accessible only to a class of marketplace participants or of any other persons or companies, unless prior approval has been granted by the OSC, the ASC or the BCSC, as applicable;
implement any new, or amendments to, fees and fee models, including any new, or amendments to, any incentives relating to arrangements that provide for equity ownership in TMX Group for marketplace participants or their affiliated entities based on trading volumes or values on TMX Group Marketplaces, unless prior approval has been granted by the OSC, ASC or BCSC, as applicable;
require a person or company to purchase or otherwise obtain products or services from any TMX Group clearing agency (“a TMX Group Clearing Agency”)[7] as a condition of the TMX Group Marketplace supplying or continuing to supply a product or service; or
require another person or company to purchase or otherwise obtain products or services from any TMX Group Marketplace or a significant TMX shareholder[8] as a condition of TMX Group, TSX Inc., or Alpha Exchange Inc. supplying or continuing to supply a product or service, unless prior approval has been granted by the OSC.

The Recognition Orders of the OSC prohibit each of TSX Inc. and Alpha Exchange Inc. from entering into fee arrangements with any marketplace participant or any other person or company that provides a price reduction on any services or products offered by that exchange that is conditional upon the purchase of any other service or product provided by that exchange or any of its affiliated entities except with the prior approval of the OSC.

The Recognition Orders of the ASC and the BCSC state that TSX Venture Exchange must not, through any fee arrangement with any TSX Venture Exchange marketplace participant or any other person, provide any pricing reduction on any services or products offered by TSX Venture Exchange that is conditional upon the purchase of any other service or product provided by TSX Venture Exchange or any of its affiliated entities.

7 Defined to mean a clearing agency owned or operated by TMX Group or TMX Group’s affiliated entities (as such term is defined in NI 21-101).

8 A “significant TMX shareholder” has the meaning ascribed thereto in the amended and restated Recognition Order issued by the OSC dated August 31, 2020.

Allocation of Resources

For so long as TSX Inc., TSX Venture Exchange, Alpha Exchange Inc., CDS, CDS Clearing, CDCC and MX carry on business as an exchange or clearing agency, as applicable, each entity must have or TMX Group must allocate, as the case may be, sufficient financial and other resources to each entity to ensure that such entity can carry out its functions.

Financial Viability Reporting

Under the terms and conditions of the Recognition Orders of the OSC, TSX Inc., CDS, CDS Clearing and Alpha Exchange Inc. are subject to specified financial viability tests to ensure that each exchange or clearing agency, as applicable, maintains sufficient financial resources to properly perform its functions. The AMF has also imposed financial viability ratios on MX, CDS and CDS Clearing. Those financial ratios are discussed under the heading “ Managing Capital ” on pages 46 to 48 of our 2020 Annual MD&A, which is incorporated by reference into this AIF. In addition, CDCC must comply with financial ratios agreed upon with the AMF and the OSC.

Terms and Conditions Imposed on TSX Inc. and Toronto Stock Exchange

TSX Inc. has special terms and conditions relating to the listing of TMX Group or any TMX Group affiliated entities on Toronto Stock Exchange. Toronto Stock Exchange has procedures which require it to promptly report to the OSC any conflicts or potential conflicts of interest that arise or may arise with respect to our continued listing or the initial listing or continued listing of a competitor of TMX Group or its affiliates. Under these procedures, we established a conflicts committee, with at least two members who are independent of TSX Inc., and all conflict determinations and resolutions must be approved by staff of the OSC. Under Ontario securities legislation, the OSC has overriding powers to make decisions about Toronto Stock Exchange if it is in the public interest. Toronto Stock Exchange’s reporting requirements and the OSC’s monitoring function for the listing of our common shares are set out in TSX Inc.’s Listings-Related Conflicts Policy.

Terms and Conditions Imposed on TSX Venture Exchange Inc.

In addition to the terms and conditions outlined above, the Recognition Orders of the ASC and BCSC relating to TSX Venture Exchange Inc. include the following terms and conditions:

Fees and incentives charged by TSX Venture Exchange Inc. must:
be allocated on an equitable basis among the exchange’s listed issuers and applicants for listings, the exchange’s marketplace participants and other marketplace participants;
not have the effect of creating barriers to access;
be balanced with the exchange’s need to have sufficient revenues to satisfy its responsibilities; and
be fair, reasonable and appropriate.

Terms and Conditions Imposed on MX

In addition to the terms and conditions outlined above applicable to MX, the Recognition Orders of the AMF for MX include the terms and conditions set forth below.

Fees shall not have the effect of creating barriers to access; however, they must take into consideration that MX must have sufficient revenues to perform its functions, its regulatory activities and its exchange operations.
MX will ensure that all the fees it imposes are reasonably and equitably allocated, the process for setting fees is fair and appropriate, and the fee model is transparent.
MX must maintain an independent division (the “Regulatory Division”) under the control and oversight of the special committee (the “Special Committee”) with clearly defined regulatory responsibilities for its market and for its participants. The Special Committee, named by the board of directors of MX, must be made up of no less than 50% of persons who: (i) are residents of Québec; (ii) satisfy the independence criteria applicable to the directors of MX; and (iii) have expertise in derivatives. The Regulatory Division:
must have a separate administrative structure and must be completely autonomous in performing its functions and in its decision-making process;
must be a separate business unit of MX and operate on a self-financing basis and must be not ‑ for ‑ profit; and
any changes to the Regulatory Division’s administrative and organizational structure or to the Special Committee that may materially affect regulatory duties and operations must receive prior approval from the AMF.

The Regulatory Division ensures neutrality and impartiality when the Regulatory Division applies the rules that govern MX’s markets and the relationships between MX and its market participants. As a recognized exchange and SRO, MX, through its Regulatory Division, is responsible for regulating its markets and its participants on a day-to-day basis. The Regulatory Division achieves this by enforcing rules and policies governing MX’s markets and the conduct of approved participants. MX’s Regulatory Division is independent from its other operations and is under the sole internal oversight of the Special Committee, which is independent from MX and its management. For further information on the Special Committee and the Regulatory Division, please refer to the “ Our Business – Derivatives Trading and Clearing – MX, CDCC and BOX – Derivatives – Regulatory Division ” section on page 22 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

Terms and Conditions Imposed on CDCC

In addition to the terms and conditions outlined above applicable to CDCC, the AMF Recognition Orders for CDCC include the terms and conditions set forth below:

CDCC will ensure that the fees it imposes are reasonably and equitably allocated, the process for setting fees is fair and appropriate, and the fee model is transparent.

Fees shall not have the effect of creating barriers to access; however, they must take into consideration that CDCC must have sufficient revenues to perform its functions.

Terms and Conditions Related to Fees Imposed on CDS and CDS Clearing

In addition to the terms and conditions outlined above applicable to CDS and CDS Clearing, the Recognition Orders of the OSC, the AMF and the BCSC, as the case may be, include, among others, the terms and conditions set forth below.

CDS Clearing will ensure that all the fees it imposes are reasonably and equitably allocated, the process for setting fees is fair and appropriate, and the fee model is transparent. While CDS Clearing fees shall not have the effect of creating barriers to access, such fees shall be balanced against the consideration that CDS Clearing must have sufficient revenues to satisfy its obligations.
CDS and CDS Clearing fees are subject to the approval of the applicable regulators and CDS Clearing’s ability to seek approval for fee increases on certain core services (as such services are defined in the Recognition Orders of the OSC and the AMF, respectively) is limited to scenarios resulting in a significant change in circumstances.
CDS Clearing is also subject to a rebate model, pursuant to which CDS Clearing must share, with certain exceptions, any annual revenue increases (as compared to the base year, 2012) on clearing and other core services (as defined in the Recognition Orders of the OSC and the AMF, respectively), on a 50/50 basis with participants.
CDS Clearing is required to rebate an amount of $4.0 million annually to participants in respect of exchange clearing services for trades conducted on an exchange or ATS.

In December 2019, CDS filed a proposal to make two changes to the existing fee model. The first was the proposal to modify its fee model by eliminating the annual rebates paid to participants based on their respective use of CDS services. The second change was the elimination of network connectivity fees currently paid by participants.

CDS withdrew the December 2019 Notice and, on February 25, 2021, published an amended proposal which included two modifications to the original application:

CDS has proposed to cease charging for reports that it transmits to participants.
CDS has proposed to modify the effective date of the proposed rebate elimination to coincide with the Modernization of Clearing Platforms launch which is expected to be in Q1/22. The elimination of the rebates is being proposed to ensure that the significant investment required to modernize CDS technology now can be made, and to ensure adequate funding of ongoing future technology upgrades, while enabling CDS to earn an appropriate rate of return on our capital investments. The elimination of network connectivity fees and report fees is intended to enable participants to obtain a further netting benefit as against the impact of the rebate elimination.

The above proposal is subject to further public comment and regulatory approval. See “Equities and Fixed Income Clearing, Settlement, Depositary and Other Services – CDS – Revenue Description” on page 20 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

Regulation of Brokerage Firms — Operations and Business Conduct Generally

All brokerage firms trading through Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange or MX must be members of a recognized SRO which regulates its members. These organizations regulate the broker-client relationships, business conduct and capital adequacy of their members. This regulation seeks to maintain the credibility of marketplaces, protect investors’ interests and instill investor confidence by addressing general issues of trading ethics and investor protection in the markets. Participating organizations and member firms trading on Toronto Stock Exchange and TSX Venture Exchange, members trading on Alpha Exchange Inc. and Canadian-approved participants trading on MX are regulated by IIROC. Foreign-approved participants trading through MX must be regulated by a recognized SRO or regulator or exempted from registration in their jurisdiction. The exchanges, however, also have criteria for access to their markets.

Regulatory Developments

For further information on regulatory developments, please refer to the “ Regulatory Changes ” section on page 11 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

Social Policies

Charitable Giving in Canada

Through our Impact Program, we work with Canadian charities in the local communities in which TMX Group operates. A committee of TMX Group employees leads our charitable giving program by reviewing charitable requests, allocating funds, and organizing individual and team volunteering activities. Every year, our employees have the opportunity to vote for a charitable cause that they believe TMX Group should support and that aligns with our values. In 2020, we donated $500,000 to 34 children’s health charities through this program across Canada.

TMX Group donated $50,000 to Food Banks Canada in 2020, a national charitable organization dedicated to helping Canadians living with food insecurity, in support of Covid-19 response efforts across Canada. In addition, the Covid-19 Response Fund was established to help fund direct to local food banks in our communities so that they can continue to respond to the impact of COVID-19.

In January 2020, Shorcan held its 22nd Annual Charity Day and raised approximately $760,000 for a range of designated charitable organizations in our local communities

TMX Group also continued to support the United Way and Centraide through its dedicated leadership campaign. Our 2020 campaign raised $39,800 through Director level employees and above in Canada.

Corporate Matching

All permanent employees are eligible to participate in our corporate matching program. TMX Group will match an employee's donation, up to a maximum of $200, made to charities from any of the following categories: education, social services, health research, arts & culture.

Volunteering

Full-time and part-time permanent employees receive two “Impact Days” per year which are paid days off to volunteer (in-person or remotely) for any charity that is important to them. While COVID-19 may have limited the opportunities to physically volunteer in our community, TMX Group employees supported and fundraised from home for causes that are important to them.

Risk Factors

A discussion of risk factors related to TMX Group and its businesses appears under the heading “ Enterprise Risk Management ” on pages 60 to 81 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

DESCRIPTION OF SHARE CAPITAL OF TMX GROUP

Our authorized capital consists of an unlimited number of common shares and an unlimited number of preference shares, issuable in series. Currently, only common shares of TMX Group Limited are issued and outstanding. No preference shares have been issued. For further information regarding our share capital, please refer to Note 26 of the 2020 Annual Financial Statements, which is incorporated by reference into this AIF.

Common Shares

Each of our common shares is entitled to one vote at all meetings of our shareholders, except for meetings where only holders of another class or series of our shares are entitled to vote separately as a class or series. Each common share is also entitled to receive dividends if, as and when declared by the board of directors of TMX Group (the “TMX Group Board”). If the TMX Group Board declares and pays dividends, it must do so in equal amounts per share on all common shares (and subject to certain priority rights of any outstanding preference shares). Common shareholders are entitled to participate in any distribution of our net assets if we liquidate, dissolve or wind-up (subject to certain priority rights of preference shareholders, if any). The common shares do not have any pre-emptive, redemption, purchase or conversion rights except for the compulsory provisions described below related to enforcing the restrictions on ownership of our voting shares.

Preference Shares

The TMX Group Board may issue preference shares at any time and in one or more series. If the TMX Group Board issues preference shares, it will, before they are issued, fix the number, consideration per share, designation of, and rights and restrictions for the preference shares of each series (subject to the special rights and restrictions attached to all preference shares). Each series of preference shares will rank equally with all other series of preference shares for the payment of dividends and return of capital if we liquidate, dissolve or wind-up. The preference shares have a priority right to receive dividends and any return of capital before the common shares and any other junior shares. We cannot amend the preference shares’ special rights and restrictions as a class without obtaining any approval required by law, and the approval of at least two-thirds of the votes cast at a meeting of preference shareholders called and held for that purpose. To date, TMX Group Limited has not issued any preference shares.

Restrictions on Ownership of Our Voting Shares

Ontario securities law states that no person or company (or combination of persons or companies acting jointly or in concert) may beneficially own or exercise control or direction over more than 10% of any class or series of our voting shares without the prior approval of the OSC (together with the share ownership restrictions imposed under the Recognition Orders of the AMF outlined below, collectively referred to as the “Share Ownership Restrictions”).

Under the Recognition Orders of the AMF, no person or company or combination of persons or companies acting jointly or in concert can beneficially own or exercise control or direction over more than 10% of any class or series of our voting shares, without the prior approval of the AMF.

The OSC and the AMF can change the Share Ownership Restrictions (including the ownership percentage threshold) in the future.

Share Ownership Restrictions in Our Articles

Our articles of amalgamation include restrictions on voting share ownership (the “TMX Group Share Restrictions”) which are substantively identical to the Share Ownership Restrictions. Our common shares are currently our only outstanding voting shares. The articles provide that these restrictions will automatically change or be removed if the Share Ownership Restrictions are changed or removed.

Our articles contain provisions to enforce the TMX Group Share Restrictions, including our ability to suspend voting rights, forfeit dividends or any other distribution, prohibit share transfers, require a sale of shares or redeem and suspend other shareholder rights. The TMX Group Board may at any time require holders of, or subscribers for, voting shares and certain other persons to make declarations and provide related information with respect to ownership, direction, or control of voting shares and certain other matters relevant to this restriction. The TMX Group Board may also require holders or subscribers to produce documents, provide responses to written questions, and attend in person to answer questions concerning any declaration. We are prohibited from accepting any subscription or issuing or registering a transfer of voting shares if it would result in a violation of the TMX Group Share Restrictions.

Restrictions on Ownership of Subsidiaries

TSX Inc.

Under Ontario securities law, no person or company (or combination of persons or companies acting jointly or in concert) may beneficially own or exercise control or direction over more than 10% of any class or series of TSX Inc.’s voting shares without the prior approval of the OSC. Any change to the ownership of TSX Inc. requires the prior approval of the OSC.

TMX Group has also agreed, in the ASC and BCSC Undertakings, to notify the ASC and BCSC if it has applied or intends to apply to the OSC for an amendment to the Recognition Order of the OSC permitting TMX Group to own, directly or indirectly, less than all of the issued and outstanding voting shares of TSX Inc.

TSX Venture Exchange Inc.

The Recognition Orders of the ASC and the BCSC for TSX Venture Exchange Inc. impose conditions related to changes in ownership. Pursuant to the ASC and BCSC Undertakings, TMX Group and TSX Inc. agreed not

to complete or authorize a transaction that would result in TSX Venture Exchange Inc. ceasing to be wholly-owned by TSX Inc. or indirectly wholly-owned by TMX Group without: (i) providing the ASC and BCSC at least three months’ prior notice of their intention; and (ii) complying with any terms and conditions that the ASC or BCSC may impose.

Alpha Exchange Inc.

TMX Group must continue to own, directly or indirectly, all of the issued and outstanding voting shares of Alpha Exchange Inc.

Montréal Exchange Inc. and Canadian Derivatives Clearing Corporation

The Recognition Orders of the AMF for MX and CDCC state that no person or company (or combination of persons or companies acting jointly or in concert) shall, without the prior approval of the AMF, own or exercise control or direction over more than 10% of any class or series of voting shares of: (i) MX, except for TMX Group; or (ii) CDCC, except for TMX Group and MX.

The Canadian Depository for Securities Limited

Under the Recognition Orders, CDS cannot change its ownership structure without the prior approval of the OSC, the AMF and the BCSC.

Ratings

TMX Group received the following credit ratings from DBRS Limited (“DBRS”), which as at the date of this AIF remain unchanged:

	DBRS
	Rating Trend
Issuer credit rating Senior unsecured debt9 Commercial paper10	A (high) Stable A (high) Stable R-1 (low) Stable

The credit ratings from DBRS are based on quantitative and qualitative considerations which are relevant for TMX Group. These ratings are intended to give an indication of the risk that TMX Group will not fulfill its obligations in a timely manner. Credit ratings are not recommendations to purchase, hold or sell securities and do not address the market price or suitability of a specific security for a particular investor. Credit ratings may not reflect the potential impact of all risks on the value of securities. In addition, real or anticipated changes in the rating assigned to a security will generally affect the market value of that

9 Our senior unsecured debt comprises our Series B Debentures, Series D Debentures, Series E Debentures and Series F Debentures (each as defined and further described below in the “ Material Contracts – Debentures ” section on page 27 of this AIF).

10 Information regarding our commercial paper program is set out in the “ Commercial Paper, Debentures, Credit and Liquidity Facilities ” section on pages 43 to 48 of our 2020 Annual MD&A and in Note 12 of the 2020 Annual Financial Statements, which are incorporated by reference into this AIF.

security. There can be no assurance that a rating will remain in effect for any given period of time or that a rating will not be revised or withdrawn entirely by a rating agency in the future.

DBRS will regularly evaluate our issuer rating and the ratings of our senior unsecured debt and commercial paper outstanding. A downgrade from our existing rating could adversely affect our cost of borrowing and/or our ability to access sources of liquidity and capital and reduce financing options available to us. See also “ Enterprise Risk Management – Financial Risk – Operational Risk ” on pages 69 to 70 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

TMX Group pays customary fees to DBRS to obtain and maintain its credit ratings. TMX Group expects to pay similar fees in the future. No additional payments were made to DBRS in respect of any other services provided to TMX Group during the past two years.

A description of the rating categories has been obtained from DBRS’ website and is provided in Appendix B to this AIF.

DIVIDENDS

We paid a dividend of $0.70 on each outstanding common share on March 12, 2021 to shareholders of record at the close of business on February 26, 2021. In 2020, 2019 and 2018, we paid dividends totalling $2.72, $2.52, and $2.24, respectively, on each outstanding common share.

As a holding company, our ability to pay dividends on our shares depends in large part upon our subsidiaries paying dividends and other amounts to us. Our subsidiaries must comply with corporate and securities laws and with their internal agreements before they may pay dividends to us. Certain capital maintenance requirements imposed on our subsidiaries may impose restrictions on the dividends or other amounts that a subsidiary may distribute to its shareholders. Our capital maintenance requirements are outlined under the heading “ Managing Capital ” on pages 46 to 48 of our 2020 Annual MD&A, which is incorporated by reference into this AIF. Further information regarding TMX Group dividends is disclosed in Note 28 of the 2020 Annual Financial Statements, which is incorporated by reference into this AIF.

Our current dividend policy is based on the following factors:

a long-term intention to provide shareholders with regular and growing dividends, within the constraints arising from changes in our prevailing and projected earnings;
prevailing market dividend yields, including those of comparable publicly traded exchange groups and other Canadian financial institutions;
the need to retain capital to support our stability and growth; and
compliance with applicable laws, regulations, orders and debt covenants.

This dividend policy is reviewed periodically by the TMX Group Board. The TMX Group Board has the sole discretion to declare and to adjust or eliminate dividends based on the above factors or other considerations.

MARKET FOR SECURITIES

Our common shares are listed on Toronto Stock Exchange under the symbol “X.” The following table sets out the high and low sale prices per common share and the volume of TMX Group common shares traded on Toronto Stock Exchange for the periods indicated, as reported by Toronto Stock Exchange.

2020	High ($)	Low($)	Volume
January	123.98	107.94	3,823,575
February	128.86	106.15	3,418,792
March	121.11	84.50	6,422,932
April	126.18	103.00	3,803,104
May	141.20	118.45	8,108,673
June	139.77	126.26	4,328,884
July	144.97	130.30	2,187,075
August	140.70	133.52	1,813,875
September	140.77	131.33	2,231,547
October	139.28	128.65	1,408,718
November	133.83	123.90	4,904,963
December	130.45	125.03	3,298,700

Prior Sales

During the most recently completed financial year, we did not issue any shares that are not listed or quoted on a marketplace. Under our commercial paper program, we are authorized to offer investors up to $500.0 million or the equivalent U.S. dollars. Further information on the commercial paper program is contained under the “ Commercial Paper, Debentures, Credit and Liquidity Facilities ” sections on pages 43 to 48 of our 2020 Annual MD&A and Note 12 of the 2020 Annual Financial Statements, which are incorporated by reference into this AIF.

DIRECTORS AND OFFICERS

Directors

As of the date of this AIF, the following individuals are the directors of TMX Group.

Name and Residence	Principal Occupation	Director Since
Charles Winograd Ontario, Canada	Chair, TMX Group Board, Senior Managing Partner, Elm Park Capital Management (mid-market lending limited partnership) and President, Winograd Capital Inc. (external consultingandprivate investment firm)	July 31, 2012
Luc Bertrand Québec,Canada	Vice Chair, National Bank Group Inc. (chartered bank)	May 13, 2011
Nicolas Darveau- Garneau California,USA	Chief Search Evangelist, Google LLC (technology company)	September 21, 2018
Christian Exshaw Ontario, Canada	Managing Director, Head Global Markets and Direct Financial Services, CIBC World Markets Inc. (investment dealer)	January 1, 2015
Marie Giguère Québec,Canada	Corporate Director	May 13, 2011
Martine Irman Ontario,Canada	Corporate Director	November 6, 2014
Harry Jaako B.C., Canada	Executive Officer, Director and Principal of Discovery Capital Management Corp. (“DCMC”) (venture capital firm) and President and Director of British Columbia DiscoveryFund Inc.(investment fund)	July 31, 2012
Moe Kermani B.C.,Canada	Managing Partner, Vanedge Capital	September 18, 2020
William Linton Ontario,Canada	Corporate Director	July 31, 2012
Jean Martel Québec,Canada	Corporate Director	July 31, 2012
John McKenzie Ontario,Canada	Chief Executive Officer, TMX Group	August 17, 2020
Gerri Sinclair British Columbia, Canada	Managing Partner, Kensington Capital Partners (investment manager), Corporate Director and Strategic Consultant	July 31, 2012
Kevin Sullivan Ontario,Canada	Founder and Chief Executive Officer, KMS Capital Ltd. (advisoryfirm),Corporate Director	July 31, 2012
Claude Tessier Québec,Canada	Chief Financial Officer, Alimentation Couche-Tard Inc.	September 18, 2020
Eric Wetlaufer Massachusetts, USA	Corporate Director	July 31, 2012

Directors are elected annually and will hold office until our next annual meeting of shareholders or until the director resigns, becomes ineligible, unable to serve or until his or her successor is elected or appointed.

The directors have had the principal occupations stated above, or other senior positions with the same, predecessor, or associated firms, for the past five years except for: (i) Ms. Giguère who was Executive Vice President, Legal Affairs and Secretariat of Caisse de dépôt et placement du Québec (pension fund) until June 2016; (ii) Ms. Irman, who was the Vice Chair, TD Securities (investment dealer) and Senior Vice President, TD Bank Group (chartered bank) until 2019; (iii) Mr. Martel, who was a Partner at Lavery, de Billy LLP until December 2018; (iv) Mr. Sullivan who was Deputy Chairman of GMP Capital Inc. (“GMP”) until December 2019; (v) Mr. Tessier, who was President of IGA Operations from 2012 to 2016; and (vi) Mr. Wetlaufer, who was Senior Managing Director & Global Head of Public Market Investments, Canada Pension Plan Investment Board (“CPPIB”) until June 2018.

TMX Group Board Charter

TMX Group is committed to ensuring high standards of corporate governance, as well as ensuring that management has a system in place to conduct the business and operations of TMX Group in a manner that is consistent with the public interest. Within the framework required by the Recognition Orders and the ASC and BCSC Undertakings, TMX Group’s governance arrangements are designed to provide fair, meaningful and diverse representation on the TMX Group Board and its committees, including appropriate representation of independent directors and a proper balance among the interests of the different persons and companies using TMX Group’s services and facilities.

The TMX Group Board charter recognizes the primary responsibility of the TMX Group Board to provide governance and stewardship and sets out the board’s responsibilities for, among other things: appointing and supervising officers including the executive officers (including setting roles and responsibilities for the Chair of the TMX Group Board and the Chief Executive Officer); strategic planning; risk management; financial reporting and management; public interest responsibilities: shareholder communication; corporate governance; and adopting and monitoring compliance with a board code of conduct and an employee code of conduct.

The complete text of the TMX Group Board charter and other related information is available on our website at www.tmx.com.

Committees of the TMX Group Board

The TMX Group Board currently has five standing committees: a governance and regulatory oversight committee, a finance and audit committee, a human resources committee, a derivatives committee and a public venture market committee. Each standing committee’s charter is posted on our website at www.tmx.com. A summary of each standing committee’s responsibilities and the members of each such committee are set out below.

Governance and Regulatory Oversight Committee

The TMX Group Board has established a Governance and Regulatory Oversight Committee, which is required to be comprised of at least four directors, all of whom are independent.

The Governance and Regulatory Oversight Committee assists the TMX Group Board by providing the TMX Group Board with recommendations relating to corporate governance in general, including without limitation: (a) all matters relating to the stewardship role of the TMX Group Board in respect of the management of the corporation; (b) board size and composition, including: (i) confirming the status of nominees to the TMX Group Board as independent before the individual is submitted to shareholders as a nominee for election to the TMX Group Board; (ii) confirming on an annual basis that the status of the directors that are independent has not changed; (iii) assessing and approving all nominees of management to the TMX Group Board; and (iv) the orientation of new members; (c) board compensation; (d) director independence; (e) overseeing environmental, social and governance reporting; and (f) such procedures as may be necessary to allow the TMX Group Board to function independently of management and non-independent directors.

The Governance and Regulatory Oversight Committee also monitors and makes recommendations with respect to trends in corporate governance, and designs and oversees compliance with policies associated with an efficient system of corporate governance. Such policies include our TMX Group Board Code of Conduct, our Employee Trading Policy, our Director Qualification Policy, and our Timely Disclosure, Confidentiality and Insider Trading Policy (the “Insider Trading Policy”).

The Insider Trading Policy applies to all directors, officers and employees. Under the Insider Trading Policy, we have established a Disclosure Committee that is responsible for updating the policy as required, monitoring the effectiveness of and compliance with the Insider Trading Policy, educating our directors, officers and employees about the policy, reviewing and authorizing written, electronic and oral disclosure by us, and monitoring our website.

The Governance and Regulatory Oversight Committee is charged with the following duties related to real, potential or perceived conflicts of interest: (a) considering real or perceived conflicts of interest that may arise, including but not limited to in the context of: (i) ownership interests in TMX Group by any marketplace participant in a marketplace owned or operated by TMX Group or TMX Group’s affiliated entities with representation on the TMX Group Board; (ii) increased concentration of ownership of each of TMX Group, TSX Inc. and Alpha Exchange Inc.; and (iii) the profit-making objective and the public interest responsibilities of TMX Group, including general oversight of the management of the regulatory and public interest responsibilities of TSX Inc.; (b) overseeing the establishment of mechanisms to avoid or appropriately manage real or perceived conflicts of interest or potential conflicts of interest, including any policies and procedures that are developed by TMX Group or TSX Inc.; (c) monitoring the operation of mechanisms that deal with conflicts of interest, including oversight of reporting of issuer regulation activities and conflicts of interest by TSX Inc.; (d) reviewing the effectiveness of the policies and procedures regarding conflicts of interest on a regular, and at least annual, basis; (e) annually preparing a written report examining the avoidance and management of conflicts of interest, the mechanisms used and the effectiveness of those mechanisms and providing the report to the TMX Group Board and to the OSC; and (f) reporting to the TMX Group Board as appropriate, and in writing directly to the OSC, on any matter that the Governance and Regulatory Oversight Committee deems appropriate, or that is required by the OSC, without first requiring TMX Group Board approval or notification for such reporting.

Committee Members

Marie Giguère (Chair), William Linton, Jean Martel, Gerri Sinclair and Charles Winograd.

Finance and Audit Committee

The Finance and Audit Committee of the TMX Group Board is comprised entirely of directors who meet the independence and financial literacy requirements set out in NI 52-110 and who are Independent.

The Finance and Audit Committee assists the TMX Group Board in fulfilling its oversight responsibilities regarding: (a) financial reporting and disclosure; (b) internal controls and receipt of complaints, including the whistleblower hotline; (c) external audit; (d) internal audit and the provision of assurance; (e) risk management; (f) financial planning, investment opportunities, treasury activities and capital plan; and (g) pension plan(s).

This committee also assists the TMX Group Board in fulfilling its enterprise risk management responsibilities by overseeing the adequacy and operating effectiveness of TMX Group’s enterprise risk management program, including assessing the adequacy of TMX Group’s risk management policies, processes and systems to manage key enterprise risks.

The committee:

is directly responsible for overseeing the work of the external auditor in connection with the audit of the annual financial statements and the review of the interim financial statements and any other audit, review or attest functions the external auditor performs for TMX Group, including the resolution of disagreements between management and the external auditor regarding financial reporting;
must pre-approve all non-audit services to be provided to TMX Group or its subsidiaries by the external auditor;
must review TMX Group’s financial statements and related management’s discussion and analysis, and annual and interim earnings press releases before they are publicly disclosed;
must be satisfied that adequate procedures are in place and must periodically assess the adequacy of those procedures for the review of TMX Group’s public disclosure of financial information extracted or derived from our financial statements, other than the public disclosures referred to above;
must establish procedures for (i) the receipt, retention and treatment of complaints received by TMX Group regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters, and for the protection from retaliation of those who report such complaints in good faith; and
must review and approve TMX Group’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor.

Committee Members

William Linton (Chair), Martine Irman, Harry Jaako, Kevin Sullivan, Claude Tessier and Eric Wetlaufer.

Charter

The full text of the Finance and Audit Committee’s charter is included as Appendix C to this AIF.

Composition of the Committee and Relevant Education and Experience of its Members

The following are the members of the Finance and Audit Committee, each of whom is a director and is independent under Sections 1.4 and 1.5 of NI 52-110. The members of the audit committee are each financially literate under Section 1.6 of NI 52-110 and bring significant skill and experience to their responsibilities including professional experience in accounting, business and finance. The specific education and experience of each member that is relevant to the performance of his or her responsibilities as a member of the committee is set out below:

William Linton (Chair)

Mr. Linton served as the Executive Vice President Finance and Chief Financial Officer of Rogers Communications from 2005 until his retirement in July 2012. Since receiving his Chartered Professional Accountant, Chartered Accountant designation in 1977, Mr. Linton has served in various management and director roles for both reporting and non-reporting issuers. Mr. Linton became a Fellow of the Institute of Chartered Professional Accountants in 2012.

Martine Irman Ms. Irman is a senior financial executive with over 30 years of treasury and securities experience. Until her retirement in 2019, Ms. Irman held several executive positions with TD Securities over the course of 25 years, including most recently, Vice Chair, Global Capital Markets Products. In this role, Ms. Irman set strategy and provided leadership for a team of 500 front-line professionals based on three platforms on different continents and had accountability for interest rate, currency trading, origination, sales (across all client channels), and institutional, corporate, commercial, retail and wealth and international banking. Before joining TD, Ms. Irman held increasingly senior treasury related roles at CCL Industries.
Harry Jaako Mr. Jaako is the Executive Officer, Director and Principal of DCMC (a venture capital firm) and is also President and Director of British Columbia Discovery Fund (VCC) Inc., a British Columbia venture capital fund managed by DCMC. As a venture capital professional, Mr. Jaako has directed investments in over 30 companies for over 15 years and has been responsible for monitoring the financial reporting of many of these investments. He has also, for more than 20 years, served as a senior executive and/or director of numerous reporting and non-reporting issuers and been involved with all aspects of their financial reporting in such executive or board capacities. Throughout his career, Mr. Jaako has also served in an advisory capacity to securities regulators and SROs in matters related to corporate finance.

Kevin Sullivan
Mr. Sullivan served as Deputy Chairman of GMP from 2010 to 2019. Prior to this time, Mr. Sullivan served as President of GMP from 1996 to 1999 and Chief Executive Officer of GMP from June 1999 to September 2010. Mr. Sullivan has 25 years of experience and relationships in the capital markets. During his tenure as Chief Executive Officer at GMP, Mr. Sullivan oversaw the creation and growth of Richardson GMP Limited and GMP Europe as well as GMP’s initial public offering in 2003. Prior to joining GMP, Mr. Sullivan spent three years in European capital markets and was also a lawyer in general practice in Calgary, Alberta.
Claude Tessier Mr. Tessier is the Chief Financial Officer of Alimentation Couche-Tard Inc. Prior to joining Couche-Tard, Mr. Tessier held the position of President of the IGA Operations Business Unit at Sobeys Inc. from 2012 to 2016 and was a member of Sobeys Inc. Executive Committee. He joined the management team of Sobeys Quebec Inc. in 2003 as Senior Vice President, Finance & Strategic Planning. Prior to his position with Sobeys Inc., Mr. Tessier gained more than 15 years of experience in senior financial leadership positions with Fly Furniture, Provigo and Costco, including in CFO and Vice President roles. He has also held management positions in Mallette International and PricewaterhouseCoopers (formerly Coopers & Lybrand). Mr. Tessier holds a Bachelor degree in Accounting from the Université du Québec à Montréal (1986) and has been a member of the Canadian Institute of Chartered Accountants since 1987.
Eric Wetlaufer Mr. Wetlaufer provides counsel as a director, advisor and investor to a range of public and private companies, with a particular focus on the technology and financial sectors. With 35 years of experience in investment management, Mr. Wetlaufer was most recently responsible for leading the CPPIB’s Public Market Investments department. Prior to joining CPPIB, Mr. Wetlaufer was the Group Chief Investment Officer, International at Fidelity Management & Research in Boston, Massachusetts. He previously held the roles of Chief Investment Officer at Putnam Investments and Managing Director at Cadence Capital Management. Mr. Wetlaufer is a Chartered Financial Analyst and a certified member of the Canadian Institute of Corporate Directors.

Pre-Approval Policies and Procedures

As set out in the committee’s charter, the committee is responsible for pre-approving any non-audit services to be provided to TMX Group or its subsidiaries by its external auditor, with reference to compatibility of the service with the external auditor’s independence.

External Auditor Services Fees (by category)

The aggregate fees billed by the external auditors, related to the years ended December 31, 2020 and 2019 for professional services are set out below:

	Fees	billed
Services Rendered	Fiscal 2020	Fiscal 2019
Audit Fees(1)	$1,291,304	$1,152,616
Audit Related Fees(2)	$846,517	$1,133,617
Tax Fees	$0	$0
All Other Fees(3)	$18,888	$53,500
Total	$2,156,709	$2,339,733

(1) For the audit of financial statements, including interim reviews of quarterly financial statements, and for services normally provided by the auditor in connection with statutory and regulatory filings.

(2) The audit related fees for the 2019 and 2020 fiscal years are for assurance and related services that are reasonably related to the performance of the audit or review of financial statements and are not reported in Audit Fees, including the audit of the TMX Group pension plan, French translation services, reporting on compliance with internal cost allocation model, auditing and reporting on compliance with approved rebate model and reporting on internal controls as required by contract or for business reasons. Variance year over year relates to timing of invoices.

(3) The other fees for the 2019 and 2020 fiscal years are primarily related to Internal Audit training and providing assistance with: model risk governance, and internal control observations & recommendations.

Human Resources Committee

The TMX Group Board has established a Human Resources Committee, comprised of directors who are non-management and are Independent. The Human Resources Committee makes recommendations to the TMX Group Board regarding (a) recommending, appointing and compensating executives, (b) approving succession plans for the Chief Executive Officer and other senior executives, (c) approving and reporting to the TMX Group Board in respect of human resources policies for executives and (d) overseeing the administration of TMX Group’s compensation and benefits plans.

The committee reviews annually the Chief Executive Officer’s performance goals and targets and corporate objectives; reviews and approves the Chief Executive Officer’s performance evaluation against individual performance goals and targets, corporate objectives and progress towards the long-term business strategy; reviews and recommends to the TMX Group Board the Chief Executive Officer’s compensation; and reviews, approves and reports to the TMX Group Board on Chief Executive Officer succession plans. On an annual basis, the committee reviews the Employee Code of Conduct and recommends to the TMX Group Board for approval any material amendments to the Employee Code of Conduct. It is also responsible for overseeing our employee benefits plans, including the design and administrative management of our pension plans. The committee is also responsible for ensuring that compensation design risks and related policies and practices are properly identified, measured and managed within acceptable tolerances in a manner that supports TMX Group’s objectives.

Committee Members

Eric Wetlaufer (Chair), Nicolas Darveau-Garneau, Marie Giguère, Gerri Sinclair and Charles Winograd.

Derivatives Committee

The TMX Group Board has established a Derivatives Committee, which advises and makes recommendations to the TMX Group Board with respect to all policy issues and matters that are likely to have a significant impact on derivatives and related products of TMX Group and its subsidiaries and,

among other things, on the role of TMX Group and/or MX and/or CDCC in relation thereto. At least a majority of the members of the Derivatives Committee are required to have expertise in derivatives.

Committee Members

Luc Bertrand (Chair), Christian Exshaw, Martine Irman and Kevin Sullivan.

Public Venture Market Committee

The TMX Group Board has established a Public Venture Market Committee, which is required to be comprised of at least 50% of directors with currently relevant expertise in the Canadian public venture capital markets. The Public Venture Market Committee’s function is to advise and make recommendations to the TMX Group Board with respect to all policy issues and matters that are likely to have a significant impact on the public venture capital market in Canada and the role of TMX Group and/or TSX Venture Exchange Inc. in relation thereto.

Committee Members

Harry Jaako (Chair), Luc Bertrand, Martine Irman, Moe Kermani, Gerri Sinclair and Kevin Sullivan.

Other TMX Group Board Committees

In December 2019, the TMX Group Board constituted the Special Committee to (i) investigate (with the assistance of an independent investigator) the historical allegations against former CEO Lou Eccleston raised in a media article in November 2019; (ii) receive the results of the independent investigator’s investigation into the historical allegations and the results of her post-investigation review; and (iii) work to develop a plan to move forward to continue to improve TMX Group’s culture and work environment. The independent investigator reported to the Special Committee that it found no evidence that Mr. Eccleston engaged in sexual harassment or sexual misconduct while employed at TMX Group. Charles Winograd is the chair of the Special Committee and its other members are Marie Giguère, Martine Irman and William Linton.

Following the retirement of Lou Eccleston as CEO of TMX Group in January 2020, a CEO Search Committee was constituted to identify a qualified candidate for appointment as CEO of TMX Group and to recommend that person to the TMX Group Board for appointment. Charles Winograd was the chair of the CEO Search Committee and its other members were Luc Bertrand, Nicholas Darveau-Garneau, Marie Giguère, William Linton, Gerri Sinclair and Eric Wetlaufer.

Executive Officers

As at the date of this AIF, the following are the executive officers of TMX Group.

Name	Position	Province/State and Country of Residence
Charles Winograd	Chairman of the Board	Ontario,Canada
John McKenzie	Chief Executive Officer	Ontario,Canada
Loui Anastasopoulos	President, Capital Formation and Enterprise MarketingOfficer	Ontario, Canada
CindyBush	Chief Human Resources Officer	Ontario,Canada
Peter Conroy	President,Trayport	Ontario,Canada
Frank Di Liso	Interim Chief Financial Officer	Ontario,Canada
Luc Fortin	President and Chief Executive Officer, MX & Global Head of Trading,TMX Group	Québec, Canada
Cheryl Graden	Chief Legal & Enterprise Corporate Affairs Officer and Corporate Secretary	Ontario, Canada
Jay Rajarathinam	Chief Operating Officer	Georgia, USA Québec, Canada

Except as otherwise noted in this AIF, all executive officers named above have held their present positions or other senior positions with TMX Group or its subsidiaries, predecessors, or associated firms for the past five years, except for Ms. Bush, who was Chief Human Resources Officer of Cineplex Entertainment LP from May 2018 to June 2020 and Vice President, Human Resources of Foresters Financial from September 2015 to April 2018; Mr. Fortin, who was, from 2011 to June 2016, the Managing Director, Canadian Head of the Institutional Client Group of HSBC Securities Inc.; and Mr. Rajarathinam, who was the Senior Vice President, Infrastructure and Engineering of NYSE / Intercontinental Exchange from December 2012 to July 2016.

Shareholdings of Directors and Executive Officers

To our knowledge, as at February 26, 2021, the directors and executive officers of TMX Group as a group, beneficially owned, directly or indirectly, or exercised control or direction over 589,317 common shares, representing approximately 1.05% of our outstanding common shares and no director or executive officer of TMX Group beneficially owned or controlled voting securities of any of our subsidiaries.

Corporate Cease Trade Orders or Bankruptcies

To our knowledge and except as otherwise disclosed below, no director or executive officer of TMX Group:

(a) is, as at the date of this AIF, or has been within the last 10 years, a director, chief executive officer or chief financial officer of any company that was the subject of a cease trade order

or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued:

(i) while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or
(ii) after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;
(b) is, as at the date of this AIF, or has been within the last 10 years, a director or executive officer of any company that, while that person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
(c) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive officer.

Mr. Jaako served as a director of Paradigm Environmental Technologies Inc. (“Paradigm”) from June 2005 to September 2013 and as Chairman from November 2007 to September 2013. In June 2014, Wolrige Mahon Limited was appointed as the receiver of the assets of Paradigm pursuant to an order of the Supreme Court of British Columbia under the Bankruptcy and Insolvency Act (Canada).

Penalties or Sanctions

To our knowledge, no director or executive officer of TMX Group (i) has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

Under our OSC Recognition Order, TMX Group is required to establish and maintain a regulatory oversight committee that, among other things, oversees the establishment of mechanisms to avoid or appropriately manage conflicts of interest or potential conflicts of interest, perceived or real. The Governance and Regulatory Oversight Committee carries out such functions. The terms of reference of this committee are outlined above under the section “Committees of the TMX Group Board – Governance and Regulatory Oversight Committee” .

Where appropriate, directors remove themselves from portions of board or committee meetings in accordance with the TMX Group Board Code of Conduct and the OBCA, or ad hoc special committees are constituted, in each case to allow independent discussion of matters at issue. In addition, the TMX Group

Board Code of Conduct, the Employee Code of Conduct and corporate and securities legislation require disclosure of conflicts by individual directors and officers.

Employees

TMX Group had 1,383 employees as at December 31, 2020 compared to 1,287 employees as at December 31, 2019. Further information on our total number of employees is contained in the “ Compensation and benefits ” section on page 35 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as disclosed elsewhere in this AIF, TMX Group is not aware of any material interest, direct or indirect of any director or executive officer of TMX Group, or any associate or affiliate of any such director or executive officer, in any transaction from April 28, 2011 (the date of incorporation of TMX Group) to December 31, 2020 or during the current financial year, or in any proposed transaction, that has materially affected or is reasonably expected to materially affect TMX Group.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common shares is TSX Trust Company at its principal offices in Toronto, Ontario.

MATERIAL CONTRACTS

The following are the only material contracts, other than the contracts entered into in the ordinary course of business, which were entered into from January 1, 2020 up to the date hereof or which were entered into after January 1, 2002 that are still in effect:

Debentures

On September 30, 2013, TMX Group entered into a trust indenture dated September 30, 2013 (the “Trust Indenture”) with Computershare Trust Company of Canada, as trustee, which Trust Indenture has been supplemented by (i) the first supplemental indenture dated September 30, 2013 in respect of $400 million aggregate principal amount of 3.253% Series A Senior Unsecured Debentures which matured on October 3, 2018; (ii) the second supplemental indenture dated September 30, 2013 in respect of $250 million aggregate principal amount of 4.461% Series B Senior Unsecured Debentures due October 3, 2023 (“Series B Debentures”); (iii) the third supplemental indenture dated September 30, 2013 in respect of $350 million aggregate principal amount of Series C floating rate Senior Unsecured Debentures which matured on October 3, 2016; (iv) the fourth supplemental indenture dated December 11, 2017 in respect of $300 million aggregate principal amount of 2.997% Series D Senior Unsecured Debentures due December 11, 2024 (“Series D Debentures”); (v) the fifth supplemental indenture dated June 5, 2018 in respect of $200 million aggregate principal amount of 3.779% Series E Senior Unsecured Debentures due June 5, 2028 (“Series E Debentures”); and (vi) the sixth supplemental indenture dated February 12, 2021 in respect of $250 million aggregate principal amount of 2.016% Series F Senior Unsecured Debentures due February 12, 2031 (“Series F Debentures”) .

Further information on the Series B Debentures, the Series D Debentures, the Series E Debentures and the Trust Indenture is contained under the “ Commercial Paper, Debentures, Credit and Liquidity Facilities ” sections on pages 43 to 48 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

Credit Agreement

On May 2, 2016, TMX Group entered into an amended and restated credit agreement (as amended on each of December 14, 2017 and September 12, 2018, the “Credit Agreement”) with a syndicate of lenders to provide a backstop to the commercial paper program and for general corporate purposes. The maturity date of the Credit Agreement is May 2, 2021.

Further information on the Credit Agreement is contained under the “ Commercial Paper, Debentures, Credit and Liquidity Facilities ” sections on pages 43 to 48 of our 2020 Annual MD&A, which is incorporated by reference into this AIF.

Copies of the Trust Indenture (including all supplements thereto) and the Credit Agreement (including all amendments thereto) have been filed on SEDAR and are available at www.sedar.com.

EXPERTS

Our auditor is KPMG LLP, who has prepared the Independent Auditors’ Report to the shareholders of TMX Group in respect of our audited annual consolidated financial statements for the years ended December 31, 2020 and 2019. KPMG LLP are the auditors of TMX Group and have confirmed that they are independent with respect to TMX Group and its related entities within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations from January 1, 2020 to February 8, 2021.

ADDITIONAL INFORMATION

Additional information about us, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities (where applicable), options to purchase securities and interests of insiders in material transactions (where applicable), and our corporate governance approach and procedures, may be found in our management information circular for our most recent annual meeting of shareholders that involved the election of directors. We also provide additional financial information in the 2020 Annual Financial Statements and in the 2020 Annual MD&A.

We will provide to any person, upon request to our Investor Relations Department at 300 - 100 Adelaide Street West, Toronto, Ontario, M5H 1S3 (or phone (416) 947-4277 or 1 (888) 873-8392; fax (416) 9474727; or email [email protected]), a copy of this AIF and any documents we incorporate by reference, a copy of the 2020 Annual Financial Statements together with the accompanying auditors’ report and the 2020 Annual MD&A, a copy of any interim financial reports and related interim management’s discussion and analysis subsequent to the financial statements for the year ended December 31, 2020. If you are not a shareholder of TMX Group, we may require you to pay a reasonable charge for a copy of any of these documents. Additional information about us, including copies of these documents, may be found on our website at www.tmx.com and on SEDAR at www.sedar.com.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This AIF of TMX Group contains “forward-looking information” (as defined in applicable Canadian securities legislation) that is based on expectations, assumptions, estimates, projections and other factors that management believes to be relevant as of the date of this AIF. Often, but not always, such forwardlooking information can be identified by the use of forward-looking words such as “plans,” “expects,” “is expected,” “budget,” “scheduled,” “targeted,” “estimates,” “forecasts,” “intends,” “anticipates,” “believes,” or variations or the negatives of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will” be taken, occur or be achieved or not be taken, occur or be achieved. Forward-looking information, by its nature, requires us to make assumptions and is subject to significant risks and uncertainties which may give rise to the possibility that our expectations or conclusions will not prove to be accurate and that our assumptions may not be correct.

Examples of forward-looking information in this AIF include, but are not limited to, growth objectives; our target dividend payout ratio; the ability of TMX Group to de-leverage and the timing thereof; the modernization of clearing platforms, including the expected cash expenditures related to the modernization of our clearing platforms and the timing of the modernization; other statements related to cost reductions; the impact of the market capitalization of TSX and TSXV issuers overall (from 2019 to 2020) on TMX Group's revenue; future changes to TMX Group's anticipated statutory income tax rate for 2020; factors relating to stock, and derivatives exchanges and clearing houses and the business, strategic goals and priorities, market conditions, pricing, proposed technology and other business initiatives and the timing and implementation thereof, the proposed timing for the completion of the acquisition of AST Canada, including the ability to obtain the required regulatory approvals and financing required to complete this acquisition, the composition of AST Canada's client base and the products and services it will provide, the anticipated benefits and synergies of the AST Canada acquisition, including the expected impact on TMX Group's earnings and adjusted earnings per share and the timing thereof, financial results or financial condition, operations and prospects of TMX Group which are subject to significant risks and uncertainties.

These risks include, but are not limited to: competition from other exchanges or marketplaces, including alternative trading systems and new technologies, on a national and international basis; dependence on the economy of Canada; adverse effects on our results caused by global economic conditions (including COVID-19) or uncertainties including changes in business cycles that impact our sector; failure to retain and attract qualified personnel; geopolitical and other factors which could cause business interruption (including COVID-19); dependence on information technology; vulnerability of our networks and third party service providers to security risks, including cyber-attacks; failure to properly identify or implement our strategies; regulatory constraints; constraints imposed by our level of indebtedness, risks of litigation or other proceedings; dependence on adequate numbers of customers; failure to develop, market or gain acceptance of new products; failure to close and effectively integrate acquisitions to achieve planned economics, or divest underperforming businesses; currency risk; adverse effect of new business activities; adverse effects from business divestitures; not being able to meet cash requirements because of our holding company structure and restrictions on paying dividends; dependence on third-party suppliers and service providers; dependence of trading operations on a small number of clients; risks associated with our clearing operations; challenges related to international expansion; restrictions on ownership of TMX Group common shares; inability to protect our intellectual property; adverse effect of a systemic market event on certain of our businesses; risks associated with the credit of customers; cost structures being largely fixed; the failure to realize cost reductions in the amount or the time frame anticipated; dependence on market activity that cannot be controlled; the regulatory constraints that apply to the

business of TMX Group and its regulated subsidiaries, costs of on exchange clearing and depository services, trading volumes (which could be higher or lower than estimated) and revenues; future levels of revenues being lower than expected or costs being higher than expected.

Forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions in connection with the ability of TMX Group to successfully compete against global and regional marketplaces; business and economic conditions generally; exchange rates (including estimates of exchange rates from Canadian dollars to the U.S. dollar or GBP), commodities prices, the level of trading and activity on markets, and particularly the level of trading in TMX Group’s key products; business development and marketing and sales activity; the continued availability of financing on appropriate terms for future projects, including the acquisition and integration of AST Canada; the amount of revenue and cost synergies resulting from the AST Canada acquisition; productivity at TMX Group, as well as that of TMX Group’s competitors; market competition; research and development activities; the successful introduction and client acceptance of new products; successful introduction of various technology assets and capabilities; the impact on TMX Group and its customers of various regulations; TMX Group’s ongoing relations with its employees; and the extent of any labour, equipment or other disruptions at any of its operations of any significance other than any planned maintenance or similar shutdowns.

In addition to the assumptions outlined above, forward looking information related to long term revenue cumulative average annual growth rate (CAGR) objectives, and long term adjusted earnings per share CAGR objectives are based on assumptions that include, but not limited to:

TMX Group's success in achieving growth initiatives and business objectives;
continued investment in growth businesses and in transformation initiatives including next generation post-trade systems;
no significant changes to our effective tax rate, recurring revenue, and number of shares outstanding;
moderate levels of market volatility;
level of listings, trading, and clearing consistent with historical activity;
economic growth consistent with historical activity; no significant changes in regulations;
continued disciplined expense management across our business;
continued re-prioritization of investment towards enterprise solutions and new capabilities;
free cash flow generation consistent with historical run rate; and
a limited impact from the COVID-19 pandemic on our plans to grow our business over the long term including on the ability of our listed issuers to raise capital.

While we anticipate that subsequent events and developments may cause our views to change, we have no intention to update this forward-looking information, except as required by applicable securities law. This forward-looking information should not be relied upon as representing our views as of any date subsequent to the date of this AIF. We have attempted to identify important factors that could cause actual actions, events or results to differ materially from those current expectations described in forwardlooking information. However, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended and that could cause actual actions, events or results to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

These factors are not intended to represent a complete list of the factors that could affect us. A description of the above-mentioned items is contained in the section “ Enterprise Risk Management ” of our 2020 Annual MD&A which is incorporated by reference into this AIF.

TRADEMARKS

Groupe TMX, TMX, the TMX design, TMX Datalinx, TMX Group, Toronto Stock Exchange, TSX, TSX Venture Exchange, and TSXV are the trademarks of TSX Inc.

Bourse de Montréal, Montréal Exchange and MX are the trademarks of Montréal Exchange Inc. and are used under license.

Alpha Exchange is the trademark of Alpha Exchange Inc. and is used under license.

CDS and CDSX are the trademarks of The Canadian Depository for Securities Limited and are used under license.

Canadian Derivatives Clearing Corporation, CCCPD, CDCC and Corporation canadienne de compensation de produits dérivés are the trademarks of the Canadian Derivatives Clearing Corporation and are used under license.

Shorcan and Shorcan Brokers are the trademarks of Shorcan Brokers Limited and are used under license.

Trayport and Joule are the trademarks of Trayport Limited and are used under license.

VisoTech is the trademark of Trayport VisoTech G.m.b.H. and is used under license.

All other trademarks used in this AIF are the property of their respective owners.

APPENDIX A Intercorporate Relationships

We carry on our business principally directly or indirectly through the companies shown below. This chart outlines the jurisdiction in which each company was incorporated, continued, formed or organized and the percentage of votes attaching to all voting securities of each company held directly or indirectly by TMX Group or its subsidiaries.

==> picture [629 x 212] intentionally omitted <==

APPENDIX B Ratings and Trends

Issuer Credit Rating

DBRS rating analysis begins with an evaluation of the fundamental creditworthiness of the issuer taking into account its business and financial risks. Based on an analysis of the relevant methodologies, policies and procedures, DBRS assigns an issuer rating that indicates its assessment of the likelihood of default. Ratings that apply to actual securities (secured or unsecured) may be higher, lower or equal to the issuer rating for a given entity. The issuer rating is the reference point used in assigning ratings to an issuer’s individual debt securities, with the most senior debt of investment grade companies typically assigned a rating equal to the issuer rating. The issuer rating is also the reference point for commercial paper and preferred share ratings. DBRS typically assigns issuer ratings on a long-term basis using its long-term obligations rating scale; however, DBRS may assign a “short-term issuer rating” using its commercial paper and short term debt rating scale to reflect the issuer’s overall creditworthiness over a short-term time horizon.

Long-Term Debt - Senior Unsecured Debt

DBRS’ long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to satisfy its financial obligations in accordance with the terms under which obligations have been issued. Ratings are based on quantitative and qualitative considerations relevant to the issuer, and the relative ranking of claims. All rating categories other than AAA and D also contain subcategories “(high)” and “(low)”. The absence of either a “(high)” or “(low)” designation indicates the rating is in the middle of the category.

The A rating is ranked third of ten rating categories. Long-term debt rated A is of good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than AA. Entities may be vulnerable to future events, but qualifying negative factors are considered manageable.

Short-Term Debt - Commercial Paper

DBRS’ short-term debt rating scale provides an opinion on the risk that an issuer will not meet its shortterm financial obligations in a timely manner. Ratings are based on quantitative and qualitative considerations relevant to the issuer and the relative ranking of claims. The R-1 and R-2 rating categories are further denoted by the subcategories “(high)”, “(middle)”, and “(low)”.

The R-1 rating is ranked first of six rating categories. Short-term debt rated R-1(low) is of good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial, but the overall strength is not as favorable as higher ratings. Entities may be vulnerable to future events, but qualifying negative factors are considered manageable.

Rating Trends

Rating trends provide guidance in respect of DBRS’s opinion regarding the outlook for a rating. Rating trends have three categories: “Positive,” “Stable” or “Negative.” The rating trend indicates the direction in which DBRS considers the rating may move if present circumstances continue, or in certain cases as it relates to the Corporate Finance sector, unless challenges are addressed by the issuer. DBRS assigns rating trends based primarily on an evaluation of the issuing entity or guarantor itself, but may also include

consideration of the outlook for the industry or industries in which the issuing entity operates, giving consideration to developments that could positively or negatively impact the sector or the company’s debt position within the sector. It is often the rating trend that reflects the initial pressures or benefits of a changing environment rather than an immediate change in the rating. A Positive or Negative trend is not an indication that a rating change is imminent. Rather, a Positive or Negative trend represents an indication that there is a greater likelihood that the rating could change in the future than would be the case if a Stable trend were assigned to the security. Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. However, in some instances, new factors emerge that may cause the Positive or Negative trend to be maintained, even as the original factors become clarified or resolved. DBRS generally notes any changes to the basis for the Positive or Negative trend.

APPENDIX C Finance & Audit Committee Charter

TMX GROUP LIMITED (the “Corporation”) FINANCE AND AUDIT COMMITTEE CHARTER

1. General

The Board of Directors of the Corporation (the “Board”) has established a Finance and Audit Committee (the “Committee”) to take steps on its behalf as are necessary to assist the Board in fulfilling its oversight responsibilities regarding:

(a) financial reporting and disclosure;

(b) oversight of internal controls and receipt of complaints including the whistleblower hotline;

(d) internal audit and the provision of assurance;

(e) risk management;
(f) financial planning, investment opportunities and treasury activities;

(g) pension plan(s); and

(h) any additional duties set out in this Charter or otherwise delegated to the Committee by the Board.

2. Members

The Board will in each year appoint a minimum of four (4) directors as members of the Committee. All members of the Committee will be independent directors as required by law and all recognition orders and exemption orders issued in respect of the Corporation by applicable securities regulatory authorities.

All members of the Committee shall be financially literate. While the Board shall determine the definition of and criteria for financial literacy, this shall, at a minimum, include the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements.

The Chief Executive Officer (“CEO”) of the Corporation and, to the extent the Chair of the Board is not otherwise a member of the Committee, the Chair, and all other non-management directors who are not members of the Committee may attend all meetings of the Committee in an ex-officio capacity and will not vote. Directors who are also members of management, other than the CEO, shall be entitled to attend meetings of the Committee if invited to do so by the Chair of the Committee. The CEO shall not attend in-camera sessions.

3. Duties

The Committee shall have the following duties:

(a) Financial Reporting and Disclosure

Annual Financial Reporting: Review the audited annual financial statements, all related management’s discussion and analysis (“MD&A”), and earnings press releases for submission to the Board for approval, as well as material financial viability tests and debt covenants.
Quarterly Financial Reporting: Review the quarterly financial statements, the related MD&A, and earnings press releases for submission to the Board for approval, as well as material financial viability tests and debt covenants.
Significant Accounting Principles and Disclosure Issues: Review with management and the external auditor, significant accounting principles and disclosure issues, including complex or unusual transactions, significant management judgments and estimates, significant changes to accounting principles, and alternative treatments under Canadian GAAP for material transactions. This shall be undertaken with a view to understanding their impact on the financial statements, and to gaining reasonable assurance that the statements are accurate, complete, do not contain any misrepresentations, and present fairly in all material respects the Corporation’s financial position, financial performance and cash flows in accordance with Canadian GAAP.
Non-GAAP Measures: On an annual basis review the principles for Non-GAAP adjustments and the disclosure of Non-GAAP and other financial measures.
Compliance: Confirm through discussions with management that Canadian GAAP and all applicable laws or regulations related to financial reporting and disclosure have been complied with.
Legal Events and Contingencies: Review any actual or anticipated litigation or other contingent events, including tax assessments or other tax matters, which could have a material current or future effect on the Corporation’s financial statements, and the manner in which these have been disclosed in the financial statements.
Other Disclosures: Satisfy itself that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information, other than the public disclosure of the information referred to in sections 1 and 2 above, and periodically assess the adequacy of those procedures.

(b) Oversight of Internal Controls and Receipt of Complaints

Oversight, Review and Assessment: Oversee, review and assess the adequacy and effectiveness of the Corporation’s system of internal controls, which include internal control over financial reporting and disclosure controls and procedures (as such terms are defined in National Instrument 52-109 -Certification of Disclosure in Issuers’ Annual and Interim Filings. (collectively, “internal controls”)) .

iii

Payments and Withholdings: Obtaining from management adequate assurances that all statutory payments and withholdings have been made.
Fraud: Oversee investigations of alleged fraud and illegality relating to the Corporation’s finances.
Complaints: Review with management that appropriate procedures exist for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters, and for the protection from retaliation of those who report such complaints in good faith. Review complaints and submissions pursuant to these procedures.

(c) External Audit

Appointment or Replacement: Recommend the appointment or replacement of the external auditor to the Board, who will consider the recommendation prior to submitting the nomination to the shareholders for their approval and oversee the orderly transition to a new external auditor, if required.
Compensation: Review with management, and make recommendations to the Board, regarding the compensation of the external auditor.
Reporting Relationships: The Committee has responsibility for the oversight of the external auditor who reports directly to the Committee.
Performance: Review with management, on a regular basis, the terms of the external auditor’s engagement, accountability, experience, qualifications and performance. Evaluate the qualifications and performance of the external auditor, including the lead audit partner, and conduct a comprehensive review every five years.
Audit Plan: Review the audit plan and scope of the external audit with the external auditor and management, and discuss with the external auditor any significant changes required in the approach or scope of their audit plan, management’s handling of any proposed adjustments identified by the external auditor, and any actions or inactions by management that limited or restricted the scope of their work.
Review of Results: Review, in the absence of management, the results of the annual external audit, the audit report thereon and the auditor’s review of the related MD&A, and discuss with the external auditor the quality of accounting principles used, any alternative treatments of financial information that have been discussed with management, the ramifications of their use and any other material communications with management.
Disagreements with Management: Resolve any disagreements between management and the external auditor regarding financial reporting.
Material Written Communications: Review all other material written communications between the external auditor and management, including the post-audit management letter

containing the recommendations of the external auditor, management’s response and, subsequently, follow up on identified weaknesses.

Interim Financial Statements: Engage the external auditor to review all interim financial statements and review, in the absence of management, the results of the auditor’s review of the interim financial statements and the auditor’s review of the related MD&A.
Other audit matters: Review any other matters related to the external audit that are to be communicated to the Committee under generally accepted auditing standards.
Meeting with External Auditor: Meet with the external auditor in the absence of management at least quarterly to discuss and review specific issues as appropriate as well as any significant matters that the external auditor may wish to bring to the Committee for its consideration.
Correspondence: Review with management and the external auditor any correspondence with regulators or governmental agencies, employee complaints or published reports that raise material issues regarding the Corporation’s financial statements or accounting policies.
Independence: At least annually, and before the external auditor issues its report on the annual financial statements, review and confirm the independence of the external auditor through discussions with the auditor on their relationship with the Corporation, including details of all non-audit services provided. Consider the safeguards implemented by the external auditor to minimize any threats to their independence, and take action to eliminate all factors that might impair, or be perceived to impair, the independence of the external auditor. Consider the number of years the lead audit partner has been assigned to the Corporation, and consider whether it is appropriate to recommend to the Board a policy of rotating the lead audit partner more frequently than every seven years, as is required under Canadian independence standards.
Non-Audit/Audit Services: Pre-approve any non-audit services to be provided to the Corporation or its subsidiaries by the external auditor, with reference to compatibility of the service with the external auditor’s independence.
Hiring Policies: Review and approve the hiring policies regarding partners, employees and former partners and employees of the present and former external auditor.

(d) Internal Audit and the Provision of Assurance

Chief Internal Auditor: Review and approve the appointment, replacement or dismissal of the CIA. The CIA reports to the Chair of the Committee functionally and the Chief Financial Officer (“CFO”) administratively.
Resources and Independence: Obtain reasonable assurance that the Internal Audit department of the Corporation has adequate resources and has sufficient independence from management.
Assurance Activities: Review with management and the CIA the mandate, staffing, plans, activities, and results of the Corporation’s assurance providers to gain reasonable assurance

that their activities are appropriately comprehensive, effective and coordinated with the external auditor.

Assurance Findings: Discuss the impact of any significant assurance findings, together with the appropriateness of management’s response, on the adequacy and effectiveness of the Corporation’s system of internal controls.
Meeting: Meet with the CIA in the absence of management at least annually to discuss and review specific issues as appropriate as well as any significant matters that the CIA may wish to bring to the Committee for its consideration, including a discussion of any restrictions or limitations placed on the CIA with respect to scope of work or access to required information.

(e) Risk Management

Enterprise Risk Management: Oversee the adequacy and operating effectiveness of the Corporation’s Enterprise Risk Management (“ERM”) program, including
Reviewing and recommending the Corporation’s Tier 1 ERM Policy and Risk Appetite Statements for submission to the Board for approval annually;
- Overseeing the activities of the Corporation’s Strategy and Risk Committee;
Assessing the adequacy of the Corporation’s risk management policies, processes and systems to manage the Key Enterprise Risks;
Reviewing periodic reports from the Corporation’s Chief Risk Officer (“CRO”); and
Obtaining reasonable assurance that the Risk Management division of the Corporation has adequate resources and has sufficient independence from the management.
Chief Risk Officer: Review and approve the appointment, replacement or dismissal of the CRO. The CRO reports to the Chair of the Committee functionally and the Senior Vice President, Group Head of Legal and Business Affairs, Enterprise Risk Management and Government Relations and Corporate Secretary administratively.
Meeting: Meet with the CRO in the absence of management at least annually to discuss and review specific issues as appropriate as well as any significant matters that the CRO may wish to bring to the Committee for its consideration, including a discussion of any restrictions or limitations placed on the CRO with respect to scope of work or access to required information.

(f) Financial Planning, Investment Opportunities and Treasury Activities

Business Plan: Review the financial assumptions set out in the Business Plan, including the annual Operating and Capital Budgets for submission to the Board for approval. Review periodic financial forecasts.

Investment Opportunities: Review and assess investment opportunities of a value exceeding management’s authority, in accordance with procedures established by the Board from time to time.
Guidelines and Policies: Review and approve guidelines and policies for the investing of cash and marketable securities and review reports from management on the results of such investments against established benchmarks.
Treasury Activities and Capital Plan: Review and assess management’s plans with respect to: managing capital; dividend recommendations and hedging transactions in accordance with procedures established by the Board from time to time.

(g) Pension Plan(s)

Oversight: Review and assess management’s reports on pension plan oversight including:
(i) Review management controls and processes with respect to the administration of investment activities, financial reporting and funding of the plan(s).
(ii) Confirm the following appointments for the management of the plan(s), subject to exceptions where the appointment authority is assigned to another party as per plan documents:
- Auditor
- Trustee
- Fund Manager
(iii) Annually, or as required, together with the Human Resources Committee, appoint members to management’s Pension Committee.
(iv) Review the actuarial assumptions used for the valuation, including the rate of return on investments and the discount rate used to arrive at the funding requirements.
(v) Review and approve the plan(s) investment objectives and guidelines annually and amend if necessary.
(vi) Review the investment performance of the funds and the investment managers, and their compliance with the investment objectives and guidelines and applicable legislation.
(vii) Review and approve the annual audited financial statements of the plan(s).

(h) Communication

Coordination with Management: The Committee will coordinate with management on audit and financial matters, and will:

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Meet privately with management to discuss any areas of concern to the Committee or management; and
Review expenses incurred by the Chair of the Board and CEO of the Corporation. Ensure that the CEO reviews all expenses incurred by direct executive reports of the CEO.

(i) Board Relationship and Reporting

Adequacy of Charter: Review and assess the adequacy of the Committee Charter annually and submit such amendments as the Committee proposes to the Governance Committee.
Disclosure: Oversee appropriate disclosure of the Committee’s Charter, and other information required to be disclosed by applicable legislation, in the Corporation’s Annual Information Form and all other applicable disclosure documents.
Reporting: Report regularly to the Board on Committee activities, issues and related recommendations.

4. Chair

The Board will in each year appoint the Chair of the Committee. The Chair shall have accounting or related financial expertise. In the Chair’s absence, or if the position is vacant, the Committee may select another member as Chair. The Chair will have the right to exercise all powers of the Committee between meetings but will attempt to involve all other members as appropriate prior to the exercise of any powers and will, in any event, advise all other members of any decisions made or powers exercised.

5. Meetings

The Committee shall meet at the request of its Chair, but in any event it will meet at least four times a year. Notices calling meetings shall be sent to all Committee members, to the CEO of the Corporation, to the Chair of the Board and to all other directors. The external auditor or any member of the Committee may call a meeting of the Committee.

6. Quorum

A majority of members of the Committee, present in person, by teleconferencing, or by videoconferencing will constitute a quorum.

7. Removal and Vacancy

A member may resign from the Committee, and may be removed and replaced at any time by the Board, and will automatically cease to be a member as soon as the member ceases to be a director. The Board will fill vacancies in the Committee by appointment from among the directors of the Board in accordance with Section 2 of this Charter. Subject to quorum requirements, if a vacancy exists on the Committee, the remaining members will exercise all its powers.

8. Experts and Advisors

The Committee may retain or appoint, at the Corporation’s expense, such experts and advisors as it deems necessary to carry out its duties, and to set and pay their compensation. The Committee shall provide notice to the Governance Committee of its actions in this regard.

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9. Secretary and Minutes

The Chair of the Committee or such person who is acting as the Chair of a meeting of the Committee, will appoint a person to act as Secretary of the Committee. The minutes of the Committee will be in writing and duly entered into the books of the Corporation. The minutes of the Committee will be circulated to all members of the Board.

AI assistant

TMX Group Limited — Annual Report 2020

47061_rns_2021-03-25_60cea3f2-5b38-43b6-9438-b2e91183951a.pdf

TMX GROUP LIMITED

TABLE OF CONTENTS

CORPORATE STRUCTURE

Name, Incorporation and Address

Intercorporate Relationships

GENERAL DEVELOPMENT OF THE BUSINESS[3]

NARRATIVE DESCRIPTION OF THE BUSINESS[5]

Our Business Operations

Regulatory Matters

Designation, Recognition and Regulation of Exchanges, Clearing Houses, and Transfer Agency and Corporate Trust Business

Terms and Conditions of TMX Group’s and its Subsidiaries’ Recognition Orders

Composition of the Boards of Directors of TMX Group Limited, TSX Inc., TSX Venture Exchange Inc. and Montréal Exchange Inc.

Restrictions on Plans and Practices imposed under the Recognition Orders

Allocation of Resources

Financial Viability Reporting

Terms and Conditions Imposed on TSX Inc. and Toronto Stock Exchange

Terms and Conditions Imposed on TSX Venture Exchange Inc.

Terms and Conditions Imposed on MX

Terms and Conditions Imposed on CDCC

Terms and Conditions Related to Fees Imposed on CDS and CDS Clearing

Regulation of Brokerage Firms — Operations and Business Conduct Generally

Regulatory Developments

Social Policies

Charitable Giving in Canada

Corporate Matching

Volunteering

Risk Factors

DESCRIPTION OF SHARE CAPITAL OF TMX GROUP

Common Shares

Preference Shares

Restrictions on Ownership of Our Voting Shares

Share Ownership Restrictions in Our Articles

Restrictions on Ownership of Subsidiaries

TSX Inc.

TSX Venture Exchange Inc.

Alpha Exchange Inc.

Montréal Exchange Inc. and Canadian Derivatives Clearing Corporation

The Canadian Depository for Securities Limited

Ratings

DIVIDENDS

MARKET FOR SECURITIES

Prior Sales

DIRECTORS AND OFFICERS

Directors

TMX Group Board Charter

Committees of the TMX Group Board

Governance and Regulatory Oversight Committee

Committee Members

Finance and Audit Committee

The committee:

Committee Members

Charter

Composition of the Committee and Relevant Education and Experience of its Members

William Linton (Chair)

Pre-Approval Policies and Procedures

External Auditor Services Fees (by category)

Human Resources Committee

Committee Members

Derivatives Committee

Committee Members

Public Venture Market Committee

Committee Members

Other TMX Group Board Committees

Executive Officers

Shareholdings of Directors and Executive Officers

Corporate Cease Trade Orders or Bankruptcies

Penalties or Sanctions

Conflicts of Interest

Employees

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

TRANSFER AGENT AND REGISTRAR

MATERIAL CONTRACTS

Debentures

Credit Agreement

EXPERTS

ADDITIONAL INFORMATION

CAUTION REGARDING FORWARD-LOOKING INFORMATION

TMX Group Limited Annual Report 2020