TMX Group could replicate US prediction markets in Canada if demand develops
The Toronto Stock Exchange parent company is watching developments by US exchange operator MEMX as it strengthens ties through a proposed deal.
NEW YORK — TMX Group, the parent company of the Toronto Stock Exchange, could introduce prediction markets in Canada if client demand develops, as the exchange operator looks to developments in the United States.
TMX Group Chief Financial Officer David Arnold said the company could replicate prediction market products being pursued by US exchange operator Members Exchange (MEMX).
"I think that is something that we could replicate in Canada," he told Bloomberg at the Bloomberg Canadian Finance Conference in New York.
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Arnold said clients would ultimately determine TMX’s approach to prediction markets.
MEMX filed in August for regulatory approval to offer binary contracts tied to corporate earnings measures, including yes-or-no contracts based on whether a company exceeds analysts’ expectations.
Arnold indicated that products of this type could potentially provide a model for TMX if demand develops in Canada.
The potential expansion would add prediction-market products to the offerings being considered by established exchanges, extending their use beyond platforms that have traditionally focused on event contracts.
TMX is also strengthening its ties with MEMX through a proposed combination with BOX Options Market.
Announced in July, the transaction will create a new US exchange group in which TMX is expected to own about 59%.
The deal puts the combined business at a value of roughly US$2.3 billion and is targeted for completion in the second half of 2027, pending regulatory approval.
As part of the transaction, TMX plans to contribute approximately US$800 million in cash as well as its existing stake in BOX.
The resulting company is expected to operate three US-listed options exchanges, an equities exchange, and a market technology business.
Canadian regulatory landscape
The possibility of TMX entering prediction markets comes as Canadian access to such products remains subject to different regulatory conditions across provinces and product categories.
Polymarket, for instance, has limited access in several provinces, including Ontario, Alberta, British Columbia, and Quebec.
In Ontario, the platform is subject to a two-year ban following a settlement with the Ontario Securities Commission concerning short-term binary contracts.
Kalshi has taken a different route into Canada through a partnership with Wealthsimple under rules overseen by the Canadian Investment Regulatory Organization.
Its Canadian product range is narrower than its US offering, with eligible contracts covering areas such as economic forecasts, environmental outcomes, and financial indicators rather than short-term sports or political markets.
Arnold also told Bloomberg that TMX could extend its trading sessions if investor demand warrants the move, following similar initiatives by major exchanges in other markets.
"If there is enough demand, we will be very, very quick to follow suit," he said, although he questioned whether sufficient demand currently exists for extended trading in some Canadian equities.
TMX’s interest in prediction markets comes as established financial-market operators increasingly explore event-based trading products.
Polymarket partnered with Nasdaq Private Market in May to launch prediction markets tied to private companies, allowing users to trade contracts linked to valuation milestones, initial public offerings and other corporate events.
Nasdaq Private Market serves as the official resolution data provider under the partnership, supplying the information used to determine the outcomes of contracts.