Summary
Luc Bertrand standing down as the head of M-X and deputy at Toronto SE is a shock move given that it was Bertrand’s success at M-X that helped rejuvenate the Canadian exchanges in the first place!
Analysis
A decade ago the directors of the Toronto Stock Exchange thought they had pulled a smart move by trading the rights for derivatives trading in all of Canada against the stock trading activity of the Montreal Exchange. They even paid a 40 million CAD bounty for the privilege. There would be a ten year period during which neither party could transgress into the products of the other.
With the money and the rights to trade all listed Canadian derivatives, Montreal’s new CEO Luc Bertrand set about closing his floor and making the Bourse de Montreal a copy book example of exchange transition during the Capital Market Revolution. From a minor provincial outpost, he managed to transform the volumes and profitability of the Montreal Exchange so that by December 2007 theresultant merger of both markets was a 1.3 billion CAD deal.
Bertrand had not only revoutionised the exchange and created his own IT subsidiary during this time, he had also helped found the Boston Options Exchange (BOX) which has become a successful niche player in the US equity options market.
Nevertheless, the Toronto board remained hostile to having the visionary Bertrand as CEO of the entire group. Certainly, it must have been embarrassing paying hundreds of millions of dollars for an asset that the TSE board had deemed less then worthless 8 years earlier!
Even when CEO Richard Nesbitt resigned in 2008, the Toronto board still could not stomach Luc Bertrand as CEO and thus they brought in ex-Singapore Exchange CEO Tom Kloet from Chicago to run the company instead.
After what has been a rather stormy period for internal management, Bertrand has clearly decided to take his leave. This is all the more interesting as Luc himself remains the largest individual shareholder in the business with more than 1.5% of the shares.
While Tom Kloet is a safe pair of hands for the group, it has to be said that Luc Bertrand’s departure from TMX is an sad moment for not just the exchange but also a man with a strong reputation as not merely a visionary but also one who could make his visionary plans succeed.
Hopefully it will not be long before an exchange seeking a new direction will seek to utilise this most amiable Canadian as their new CEO.
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