TMX Group Limited

Paul Malcolmson - Director, IR Lou Eccleston - CEO Michael Ptasznik - CFO

Shubha Khan - National Bank Financials Graham Ryding - TD Securities Paul Holden - CIBC Geoff Kwan - RBC Capital Markets

Thank you Anastasia and good morning everyone. Thank you for joining us today for the second quarter 2015 conference call for TMX Group.

As you know we announced our results last evening. A copy of the press release is available on our website tmx.com, under Investor Relations.

Today we have we have with us Lou Eccleston, our Chief Executive Officer; and Michael Ptasznik, our Chief Financial Officer. Following some opening remarks from Lou and Michael, we’ll have a question-and-answer session.

Before we begin I want to remind you that certain statements made on the call today may be considered forward-looking, and I refer you to the risk factors outlined in today’s press release and in reports filed by TMX Group with regulatory authorities. Now I'd like to turn the call over to Lou.

Thanks Paul. Good morning everyone and thanks for joining us to discuss TMX Group’s financial results for the second quarter of 2015.

Judging by the comments I read this morning I'm assuming most of you have now read through the press release and the second quarter financial statements filed last night. Michael is going to take the insight numbers in a few moments.

Let me just get started though. This is certainly an interesting period in TMX's history and certainly much has changed here since our last call.

Second quarter marked the beginning of the execution of the strategic transformation for TMX. I'm going to take a few minutes now to walk you through the key changes we've made already and try to frame my remarks in order to explain the progress we've made to address the challenges that we face.

One of the most significant challenges we had to manage throughout the first half of the year was the lingering low volatility environment and weakened commodity prices across North American markets which continue to have negative impact on certain parts of our business. TMX and the TSX venture exchange continues to be the most severely impacted in terms of market activity on the listings and the trading side.

But I want to assure you that we are taking a hard and urgent look at coming up with new approaches and solutions to help turn this vital market around. We're focused on ways to leverage and literally reimagine our operating models across NEX and TSXV in ways that do several things.

One, we're looking to facilitate more capital formation opportunities for our current clients and their investors. We're looking at ways to improve trailing liquidity, how can we lower expense and administrative burdens on current and new listed companies and how can we create a more attractive venue for emerging digital companies in the industries like technology and healthcare.

And this is about expanding on the existing franchise that we have today and the resource as well. And then finally, how can we expand our capital community to reach rich sources of capital in the venture and the corporate world.

You may have noticed the trends towards technology-driven innovation companies becoming what is an ever increasing percentage now of new listings on TSXV. In fact in the first half of the 2015, we've listed 13 national resource companies and 14 technology, life science and clean-tech companies.

We've also listed another 16 Capital Pool companies in diversified industries in the first half of the year. We're going to continue our own efforts to innovate at TSXV and expand what is already a global leading resource franchise to also be a preferred venue for innovation companies and digital entrepreneurs renewals which is growing number in Canada and throughout North America and around the world.

Just to give you a few examples of these types of companies that have listed very recently on TSXV, Solegear is a BC based company that's specialized in proprietary biopolymer formulations. Then you have Frankly Inc., a Silicon Valley and a U.S.

Social Media company. Alpha Peak, a Chinese leisure industry company and Seattle Moby Inc., [ph], an Israeli technology company that listed on TSXV just last week.

Now of course there is risk involved in investing in early stage companies but there is also a potential upside. You’ve heard us talk about the more than 600 venture companies that have graduated to the Toronto Stock Exchange.

That broader risk reward correlation is the very nature of venture investing and we are really excited that companies like these have chosen the TSXV to go public with the support of both venture and corporate partners. So I think that’s about the beginning of an expansion well underway now building on the resource franchise.

A vibrant venture market is important for our business certainly but it's important for Canada and the global community. And we're going to able to share some very specific ideas and initiatives how to approach this with you on our next call we work through these ideas.

The announcements we've made over the last few weeks are pivotal changes for TMX and hopefully they also send a clear signal that TMX is advancing beyond the bundle of asset and building stronger, more cohesive company that will proactively pursue solutions that address both cyclical and systemic changes and challenges. As I outlined in our Q1 call, we engaged in a comprehensive strategic review of our entire organization, including rethinking our mission, our vision, our operating structures and our investment strategy.

Our goal through this whole process was to build a through 360 degree view of TMX Group, our position in the broader marketplace, what are the most attractive areas for organic growth and what do we need to do to execute successfully against this new strategy. It's with this full perspective that we announced that we are taking key steps to face challenges in our operating environment head on.

In June, we've announced the realignment of the organization to position us to realize [indiscernible] and technology driven solutions providers that puts clients first. We've established local enterprise services lead by Jean Desgagne, with the objective of creating a coordinated and collaborative technology and operations capabilities across all of TMX.

Jean’s mandate is two-fold. One, look across the entire TMX company and involved the organization at maximize the efficiencies and productivities while minimizing our cost.

Two, involve clients with digital enterprise that leverages new technology through these kinds of market and increased competitive advantage. We've also identified a distinct path to successfully execute the strategy by prioritizing future investments and leveraging our existing resources and capabilities around five strategic pillars which I’d like to quickly put in context for you this morning.

The first pillar is capital formation. This is department [ph] which TMX plays a vital role here in Canada and beyond as I mentioned.

My comments around the venture exchange highlight our focus for this pillar. We're looking for creative new ways to expand our capital community and find effective means to help all types of issuers raise capital they need at all states of their development.

Another interesting initiative here an addition to some of the new listings that I mentioned earlier, that really highlights the global nature of franchise is in May of this year along with the Santiago Stock Exchange, we celebrate a launch of SSEV, which is a new public venture capital market for small and early stage companies in one of Latin American large economies. The goal here is to create a streamlined dual-listing process that will provide TSXV companies, a cost effective investing opportunity to access public venture capital in Latin America and Chilean companies to do the same in our markets here.

Under the agreement, companies listed on TSXV may choose to list on the new market. The second pillar that I just want to mention is derivatives.

We're working to develop and create new client driven products and to leverage the increasing demand for derivative products both in Canada and around the world. I think we have a great opportunity now to grow our business and build our Montreal exchange brands even stronger domestically and around the world.

The third pillar of our strategic focus is market insights. Focus here is on the derivative and integrated datasets with the intention to fuel high value proprietary and third-party analytics to help clients make better trading and investment decisions.

And in June we announced the launch of eXplore, which is a TMX's innovation lab. This is a new initiative that will leverage both emerging and in-house technology and intellectual capital to create products and services that will provide competitive advantages to domestic and international clients.

Think of eXplore as design and development space where rotational selection of TMX Group employees will focus on market solutions in both technology and around Big Data analytics. Also very importantly eXplore will connect with external innovation networks to learn from and build on new knowledge domains in financial services research.

Fourth pillar of our refined strategy is market solutions. Our goal this year is to add to TMX new capabilities and available technology to introduce new operating models into new and untapped sectors and asset classes.

We've announced our first initiative here in June that fits under the market solutions pillar with a solution called AgriClear. AgriClear is a virtual marketplace for trading cattle.

AgriClear is a very similar concept, when you think about it's about it, for the cattle industry as Amazon was to retail. Very large business, high expenses and unautomated [ph].

So very interesting way to leverage our capabilities and that’s what just the solutions pillar is all about. So AgriClear leverages those capabilities and specifically NGX's expertise across multiple areas like price discovery, delivery, payments and settlements to offer some new solutions in a very large market.

Although, early days for this initiative, early interest has been very strong and take up so far has been steady and building. The fifth pillar is efficient markets.

This underpins all that we do here at TMX. This pillar represents our ongoing efforts to operate innovative, efficient, reliable and easy-to-use platforms for trading and clearing.

And as most of you are aware we've taken major steps this year to increase efficiencies for equity trading clients. The launches of its innovative trading model is on track to launch in September of this year which will bring new opportunities for efficient interactions between natural and proprietary order flow.

We've also begun to implement important changes to our equity trading fees, which are designed to address some very long standing concerns with the maker-taker fee model and deliver significant benefits to the market. We are one of the first Exchanges globally to commit to these kinds of changes.

Our long life order proposal designed to reward committed liquidity has received positive feedback from working groups, committees and public comments and is on track for Q4 launch. At the end of June, TMX Atrium launched the new microwave wireless network group that connect TMX's Group primary data facility in the greater Toronto area to three major New York area liquidity centers.

So think of those pillars as our investment filters, which we will then develop specific plans from. So now let's quickly turn to the broader business.

TMX is well positioned to grow and we will continue to examine opportunities to accelerate our growth objectives across those five pillars. We're zeroing in on the greatest areas of need for clients in the markets we serve.

And going forward, our energy is going to be spent working to increase the value of the service we provide with a renewed and relentless focus on our clients and the markets they operated. With that growing focus last month, we also announced a new leader for equities trading and listings business.

Nick Thadaney will be joining us as President and CEO for Global Equity Capital Markets on September 1st. Both Jean and Nick are experienced business leaders with proven track records of building innovative and client driven organizational change.

I'm confident that they can help our team lead TMX to strengthened relationships and an enhanced client experience for all segments in our market. We've also created new executive role that will focus on a TMX wide commercial strategy and client experience.

The individual in this role will set the course for the TMX's client facing organizational framework and develop a robust system for best-in-class sale and client management. We have now begun the process of exploring the markets and recruiting for candidates for that position.

In the area of what we will and what we will not invest in, last month we also announced the divestiture of EQUICOM. This was a carefully considered move and one made in the scope of our new strategic direction.

As we've said we're focused on surgical and definitive steps to sustainable long-term growth and we will deemphasize certain non-core businesses either by divesting or by entering into a partnership joint venture or outsourcing arrangement. Just to mention, although we no longer own the assets we'll continue to recommend EQUICOM’s excellent investor relations consulting services to our listed issuers.

I also want to just take this opportunity to thank two executives who left TMX; Brenda Hoffman and Kevan Cowan. They both made many contributions to TMX Group.

Brenda was instrumental in building TMX's robust world-leading exchange technology platform and she is very deservedly well respected and recognized for her expertise. Kevan's industry knowledge is extraordinary and his commitment to our company was deep and clear.

And I thank him for his leadership and dedication in his multiple roles with the organization. In closing I think it’s fair to say it was a busy quarter, one, where we made progress towards building the future TMX.

We have lots of work to do but we are well underway towards that goal. Through each of our strategic pillars there are detailed multi-year investment and business plans and development.

For global enterprise services we are well into the planning for organizing a common technology and operations strategy that cuts across our business and will produce the most effective and cost efficient structure. We will be able to share more detail on our efforts with you on our Q3 call.

Our strategy going forward will center around a few key things: A strict investment discipline that's built on those pillars I just talked about; the execution of a business plan within each of those pillars that maximize their growth potential; a prioritization process that looks to address our client's major challenges; and as always to operate with unyielding integrity in support of our public interest mandate. The bedrock here at TMX has begun for building a cultural of urgency and positioning this company for profitable growth.

This is not business as usual. The usual is not just about infrastructure anymore.

This is business is about moving towards our vision to be a technology driven solutions provider that puts clients first. With that I'm going to turn the call over to Michael and I look forward to your questions after that.

Thank you, Lou and good morning everyone. I'll begin by talking about our second quarter results on a year-over-year basis.

For this past quarter there was a 2% decline in revenue, a 4% increase in operating expenses and 11% decline in income from operations. Reported EPS was up $1.51 per share and adjusted EPS was down $0.08 at $0.93.

As you’ll recall in Q2, '14 we're reported a loss per share reflecting the impairment charge of $1.31 relating to BOX and other assets. Adjusted EPS declined on a year-over-year basis, reflecting somewhat lower revenue and higher operating expenses.

As you've noted, there were several adjustments to EPS this past quarter. These included strategic realignment expenses of $0.05 per share related to the strategic transformation that Lou just described.

As we now begin the execution of that transformation we have and will continue to incur incremental expenses. These included severance cost of $0.03 per share, included within comp and benefits, and professional fees of $0.02 per share related to the strategic review process included within G&A.

We also recorded impairment charges of $0.10 per share related to certain non-core assets EQUICOM and ir2020 this past quarter. As Lou indicated, we're continuing to build our specific plans and we will look to provide you with greater clarity in the upcoming quarters.

In addition, we added back $0.13 per share related to a tax adjustment coming out of the recent increase in Alberta corporate income tax rates. Finally, amortization of intangibles related to acquisitions of $0.14 per share has been excluded from EPS as has been our practice for some time.

Turning to revenue, there were increases from Canadian derivatives trading and information services, which were more than offset lower revenue from issuer services, cash markets trading and BOX. The issuers services revenue decline of 8% compared with last year, was largely due to decrease in additional listing fee revenue which partially reflects lower finance activity for TSX's venture listed companies due to reduced commodity prices, particularly crude oil and various metals.

As you'll notice in our statistics, the number of transactions billed for Toronto Stock Exchange listed issuers, general additional fee listing fees dropped by 13% from 350 in Q2 last year to 303 this past quarter. Initial listing fee revenue also declined reflecting a decrease in the average revenue for new listing on TSX.

Sustaining listing fees increased in Q1, '15 over Q1, '14 reflecting a higher market cap on TSX at the end of 2014 as well as from the impact of increase in the maximum sustaining fee effective January 1, 2015. The increase was somewhat offset by the impact of a lower overall market capitalization at the end of 2014 for TSX venture companies which resulted in lower revenue from those issuers.

Revenue from cash markets trading and clearing declined due to lower fixed income revenue from Shorcan reflecting lower volumes in Government of Canada and provincial bonds. Revenue and volumes for cash equities increased slightly in Q2 over the prior year.

Derivatives volume increased on MX by 7% year-over-year reflecting higher trading of options on ETFs. However, BOX revenue declined again this past quarter due to a 19% decrease in volumes.

Starting in January of this year, participants received volume performance rights as an incentive to provide liquidity. However these have yet to translate into any significant change in volume.

The associated costs are reported as reduction in revenue. Offsetting these decreases, there was a positive impact from the strengthening of the US dollar versus the Canadian dollar.

Revenue from energy trading increased in Q2 reflecting higher NGX volumes, increased Shorcan energy brokerage revenue, the positive impact from the strong US dollar, increased inject [ph] access fees and price increases for certain natural gas contracts. Offsetting these increase, there was a higher recovery of previously deferred NGX revenue in Q2 '14 compared to Q2 '15.

Now turning to cost, as I mentioned, operating expenses in Q2 '15 were up 4% compared with last year and included $3.4 million or $0.01 per share for strategic realignment expenses. This included servant's cost and professional fees related to the strategic review process.

There were several other factors contributing to the higher operating expenses including cost to support major listed [ph] and expenses related to Microwave Network business of Strike Technology Services which was acquired at the end of October last year and is included in both comp and benefits and IT costs. In Q2 we deferred some initial spending as we worked to complete the strategic review process.

Looking in our financials also on the sequential basis revenue in Q2 '15 was down by 4% compared with Q1, '15 largely due to a decrease in trading revenue from cash derivatives and energy markets and information services. In addition, technology services and other revenue was lower in Q2 '15 compared with Q1 '15 reflecting both lower revenue from Razor Risk and net FX losses in Q2 '15 compared with the net FX gains in Q1 '15.

Decreases were somewhat offset by an increase in initial and additional listing fee revenue and other issuer services revenue. Operating expenses decreased by 2% from Q1 '15 to Q2 '15 primarily reflecting lower costs associated with our employee performance incentive plans, lower payroll taxes and lower cost related to severance in Q2 compared with Q1.

The decrease in these costs was somewhat offset by higher technology and marketing expenses related to initiatives. Income from operations decreased from Q1, '15 reflecting the impact of lower revenue partially offset by the decrease in operating expenses.

We've reduced our debt by about $13 million during Q2 but during Q2 to approximately $42 million year-to-date and debt repayment will continue to be the primary use of our cash, excess cash in 2015. And yesterday, our Board declared a quarterly dividend of $0.40 per common share to be paid on September 4, 2015 to shareholders record on August 21, 2015.

And with that, I'll turn it back to Paul for the Q&A session.

Thanks Michael, Anastasia could you define the process for the question-and-answer session.

Thanks good morning. Lou, appreciate the color you gave us on the underpinnings of the strategic plans.

Just wondering though, could you comment on the specifically on the duration and the cost of the strategic realignment. I guess what I'm asking is have you set yourselves a specific date by which time the realignment has to be completed?

And have you explicitly budgeted it for the initiatives or you're going to leave it open ended and update the Street as and when business change is take place.

Well it's probably a little bit of everything you've mentioned. But our target date to be in what I will call real execution mode on this strategy is as we move into 2016.

And then I think as we move through that, really changing the dynamics of the business will take the better part of '16, probably into '17. But we look to be in execution mode by '16 which means when I mentioned that we're working through all of detail plans now for each pillar we're working through our detailed plan for both enterprise services.

We're looking to give you some more specifics around that when we talk about the Q3 results. And then again, when we talk about Q4 results in Q1 of 2016, we think we'll be giving you a pretty detailed look at what the plans looks like.

So that’s our goal for this. So very specific in terms of when we want to be in execution mode, but still some things to be determined as we move through the rest of this year we will fill you either as they happen or certainly as we talk about results.

Got it. And so that being the case, the $3.4 million of I guess strategic realignment expenses that you incurred during the quarter, will this -- will this be a recurring item for the foreseeable future so through 2016 certainly through 2016 and probably through 2017 as well.

Even though the quantum may change or fluctuate from quarter-to-quarter, is that a fair assumption.

I think it depends on what we do. I don't think we will be seeing that throughout 2016.

The idea will be that in Q3 and Q4 as we finalize our plans that we would be able to come back with a number that gives [ph] as what the restructuring cost will be or what the realignment cost will be in total. And we'll be able to then tell you what number is, but that will be closer to, as Lou said probably when we publish the Q4 results.

So the next year we'll have a better idea as to what that number will be.

Yeah we're hoping, as Michael said to be through that point this year. And then next year be talking to you about how the progress is against the execution.

Okay. Just staying on operating expenses, Mike there were about $5 million in severance cost in the first quarter.

And I think at the time you talked about annual compensation expense or cost savings of about $4 million a year if I'm not mistaken. So were any of those expenses or expense savings in the Q2 number or is that are you -- will that come through later.

Those were included in, yes you would have seen some of that in the Q2 numbers.

Okay. Final question before I re-queue is on issuer services revenue, slightly weaker this quarter and I'm assuming that's mainly driven by the drop in market data subscriptions on the TFX.

So I'm just wondering could you comment on what might have driven that and number down 2% sequentially.

I'm sorry you mentioned issuer services and then you mentioned market data.

Not issuer services, information services.

Okay sorry so information services. So on the information services I think the biggest change in the quarter was related to lower auto recoveries in the quarter relative to the prior period.

So in Q2 of last year we had some significant auto recovery so the number of different clients and that was probably the biggest difference between the two quarters. There were a bit of lower subscriptions as well slightly offset by some FX gains in the quarter on that business plus also the addition of the Microwave business or the Strike business yeah.

Okay that’s helpful, thank you.

Hi yeah just on the capital formation side, I guess what are you planning to do differently going forward to attract technology type listings on the TSX venture relative to what TMX has been doing in the past, maybe just some context what how you're planning to do that.

Yeah Graham, I mean there is a number of things that we're working on now that will range, everything from getting out from a pure business development standpoint to making sure that these companies understand that we are a channel. And really proactively being out there in the marketplace, there is a very healthy pipeline, digital and technology companies in these industries that I mentioned both in Canada and in North America.

And step one is just going to be to make sure that we're out there in a very proactive way, so that they know that as a channel. The second thing is that we're looking at literally how these entities are structured.

You've got something that's been in place with NEX and the venture exchange for a quite a while. And we're looking at ways and talking to it, to lots of people in the market they try to understand better if there is a way to set that up.

So that movement across NEX venture is venture -- how do we make Venture a more attractive exchange. It's really a number of ways, how do we build on that resource franchise.

So we've got lots of dialog going on with participants in the market, issuers and other stakeholders in the market to think about are the structural changes we can take there on top of just getting and make sure that they know we are a channel. I mean at the underpinning of that we have the most successful model in the world for companies to go public in venture world.

And so part of that is the getting out, selling that. and the second part of that is making sure that we've got the right structure.

We've got to address this issue around how much trading should there be in the exchange, what's the right venue to draw these entrepreneurs because once they know about they look at a very attractive venue. So it's really a combination of getting word out on top of looking at potential structural changes.

Okay great. And then, the initiative around AgriClear, can you give us some context as how big the market opportunity is there and directing in that, it's the strategy I guess at risk of over simplifying you are just using technology and to automate it and compete on price, is that fair.

Well, it's not -- price is a factor, there is no doubt but it's really around using technology to create some advantages for clients in that marketplace they don't have today. So you look at the market it's a massive market, I mean it's a $90 billion market.

The fee part of that market is around $1.5 billion and we’ve spent enormous and time talking to all participants and industry associations. And what you have is a very inefficient market right now that's based on physical location and one-to-one payment.

So when you think about what an Amazon did for retailers, creating a virtual online marketplace idea of price transparency, the idea of surety of payment reducing the payment risk and having physical clearing, these are attributes, I talked about capabilities that we have at TMX, it's taken capabilities into a new market and there is a list of markets like that out there. So it's not just about cutting the price it's changing the way business is actually done in the marketplace by letting someone move across physical boundaries and look at these virtual marketplaces and then helping them with the surety of payment which is what we do at NGX, the physical commodities business.

So we think about price transparency, the clearing side of that facilitates delivery, know that the attributes are moving to the marketplace. So the fact that we can lower the cost to clients in the marketplace is not a function of just cutting price.

It's a function of efficiencies in the marketplace driven by technology.

Okay great. And then just quickly [indiscernible] color there, quickly Michael, did you pay down debt this year, I didn’t find that yet.

Yeah, we did, over $13 million.

Thank you.

Thank you good morning.

Good morning

Couple of questions on the comment around de-emphasizing certain non-core businesses. So first off how are you thinking about the decision of divesting versus partnerships and JVs?

There is a couple of things there. One is the output, or the product if you will, of what that asset produces.

And what do we want to do with it. An example would be when you think about Strike or Atrium or like that.

there seems to be a value placed on that by clients in terms of being able to offer that service, along with our information services. On the other hand, I'm not really excited about having to manage those infrastructures.

And so think about our mission as having then around being a preferred infrastructure provider, moving to a technology driven solution provider. So I want to think about that well if there is a value, if the client’s value offering the service then maybe there is a smarter way to be able to still offer that service, but not have to have a burden of managing all the infrastructure.

The other big component on that if there isn’t an output like that, that you want to package, then it's going to be about economics, and it's going to be about where can we work, what is going to be the most advantageous and for TMX financially and for shareholders and then look at it from that perspective. Because not everything, as you know, a lot of these non-core assets are smaller and so it's going to be a little bit more complicated.

It's not just like we put them all for sale. There is some different issues around the businesses.

I think we have be creative. But it's about what's the output of the product and then the second part of that is what’s the best financially we can do.

Okay I understood that's good. And appreciate very much that you've announced a lot over the last -- next nine months and not to take away from that at all with this next question.

But just wanted to ask on market insights, because we haven't heard so much on that front to date and it is that maybe just because it’s sort of longer duration in nature in terms of the changes you want to make there or just we're going to hear more about in the Q3, Q4, maybe any kind of thoughts on the realignment in that vertical.

No, that’s fair. I think it's a function of something we really haven’t done a lot of in the past.

We haven’t built analytics on top of our data. And so it's in the process though, I mean we've got a number of prototype applications already in the work.

So I think it's really a question of having something that we thought was robust enough and have got in the market before we started showing it. But that's why we said that's more of a next quarter.

Okay. And then a couple of questions on the -- or one question on the quarter itself.

The decline in the Razor Risk revenue is that just due to normal lumpiness with that business, nothing fundamentally has really changed there, I assume.

It's a combination of the lumpiness in the business plus also into Q1 some of the revenue there was related to -- was largely related to the FX gain that we saw. And so that was a big part of in Q1 as well.

And in then in terms of the price changes taking place on the cash equities trading fees with the marker-taker model, is that something you still expect to be revenue neutral overtime as those price changes are phased in.

Yeah, I think, that's fair.

Okay that's good. That's all I had.

Thank you.

Hi, good morning. I know Mike, I think you've mentioned on the market data size the lower subscribers quarter-over-quarter.

Was there anything around that in terms of some color you can provide or was this kind of generally indicative of kind of the weaker capital market conditions?

Yeah, thanks actually I think I answered the last question related to Q2 of last year and the question may have been related to Q1. So on a sequential basis we have seen a decline both in the revenue and it is driven by the subscriptions.

And I think the way to think about it is a really does reflect an overall decline in the capital market activity. Also obviously with the slowdown that we’ve seen in the commodity market overall and the reduction that we saw on trading and listing typically you would see a bit of a lag of that, through the market data.

So there has always has been a lag on the impact on that business both on the upside and on the downside. So I do think going back to the quarter versus on a sequential basis that some of the decline or the majority of decline is coming from subscriptions and it is just reflective of the industry dynamics.

Okay and thanks. And then just the other question I had is I know it's early days with the initiatives that you trying to improve the volumes at BOX.

I know the industry volumes haven't been that great either. But if this plan to try and drive increased trading volumes doesn't work out to at least what you guys are expecting.

I mean how do you guys think about the capital that you've got invest in that asset.

Well I think as you're right and Michael talked about the work we've done so far with the volume driven on shift incentives. And look we're watching it very closely and like every other asset around our portfolio, if we don't think we can make that growing profitable business then we'll have to look at alternatives.

So right now we're looking at it is trying to make sure that the incentives we have put in place get every bit of a chance to succeed and if they don't then we'll take a look at alternatives.

Okay, thank you.

Thank you Anastasia and thank you everyone for listening today. The contact information for media as well as investor relations is in today's press release and we'd be happy to take further questions.

Once again thank you and have a good day.