Thank you. All right. Good morning, everybody. Welcome to our next session here. I'm Ben Budish. If any of you don't know me, I cover the U.S. brokers, asset managers, and exchanges. And for this next fireside chat, we've got David Arnold, CFO of TMX. David, thanks so much for being here.
Yeah, thanks for having me. It's good to be here, Ben. And, always nice to be in New York.
Great to have you. Just to kick things off, you know, broadly, can you talk a little bit about the macro backdrop from the Canadian perspective? How has volatility, trade tensions with the U.S., things like that, been impacting the business?
Look, I mean, global uncertainty, quite frankly, and kind of the interest rate outlook, as you'd expect, Ben, continues to really drive elevated volumes across our marketplaces. We've seen open interest grow at I think it's around 60%, year to date on the Montreal Exchange, and that's really driven out of a lot of the uncertainty and the volatility in the macroeconomic, you know, landscape. Equity volumes are up also quite substantially 14% year over year, so that's good. But when I look beyond the volatility that's really coming from the macroeconomic conditions, it's looking at some of the things we've done. Some of our new product launches and innovations have really helped us, some of the sunsetting of some of our market-making programs, so those are the things that underlie or almost being overshadowed by the macroeconomic kind of factors.
Great. You know, along the same lines, you know, we get asked about the IPO market a lot in the U.S. What are you seeing from the Canadian perspective? What does the current pipeline look like? You know, how are you feeling about the next six to 12 months for new listings on the TMX?
Well, you know, if I knew the answer to that, I would trade. But what I can tell you is there is a global resurgence that is starting to show signs. We're starting to see some positive signs in the U.S. And I think Canada is a fast follower, traditionally when it comes to kind of the IPO pipeline. So yeah, it's seeing signs of resurgence. You know, beyond IPOs, it's been very robust. ETFs and related other non-corporate issuers have really been robust. I mean, we're on track to beat our previous record of ETF listings from last year. So I think that's good. You did touch on the pipeline, Ben, and it's robust and very diverse.
Over 50%, of the pipeline is companies that are outside of Canada, and over 50%, of them are innovation sector businesses. So it's robust. I just think we have a lot of capital waiting to be deployed, and we need some founder shareholders and board of directors to feel comfortable moving into the public market.
All right. So moving into your trading business, you know, you mentioned you don't trade, but you trade.
Mm-hmm.
You know, you've seen very strong growth in Canadian derivatives on the Montreal Exchange, particularly in your shorter-term contracts. Or sorry, the longer-term contracts. You know, walk us through some of the key drivers there. You know, to what extent have TMX's initiatives to sort of build out liquidity across the curve impacted activity? Do you think you can replicate in, like, the two and five-year contracts what you've seen, in the 10-year side?
It's a great question, Ben. I mean, it's, there's a lot to unpack there. So let's kind of break it down, right? So, obviously, there's been market volume growth that has really helped in the derivatives space. But it's also the innovations, right? The new products that we've brought to market. And so, you know, I would say they've played almost a quarter of the momentum. It's kind of what I would call the new initiatives. But if you look at that long-term kind of average, it's around 11% CAGR over the last 10 years. And we've been, you know, we categorize the derivatives trading and clearing business as a strong grower, which for us we define as high singles to double digits. Obviously, on a look-back, CAGR of roughly 10-11% over the 10 years.
Look, the 10-year, as you touched on, the CGB, that is a very mature product, and it's remained strong, roughly 11% year-to-date growth. But in the two-year and the five-year, we're actually seeing better performance than that, right? I think, on the two-year, it's roughly around 27%, and roughly around 30%, on the five-year. So, CGZ, which is the two-year, and the CGF, which is the five-year, are showing rapid adoption. And, bless you. And I think that it will outpace, quite frankly, what we've done in the 10-year. Even though it's doing it early, I think it will sustain long-term.
Great. In the U.S., you know, your ATS launched earlier this year. Trading volume looks off to a pretty solid start.
Mm-hmm.
You know, maybe for those who are unfamiliar, can you talk a little bit about this venue? You know, what are you trying to achieve? How does the technology differentiate? Maybe we'll start there.
Yeah. So let me jump to the technology first, and then we'll see if you have a follow-on. But you know, we launched in January of this year. In the first four months, you know, we literally compounded on ourselves every single month. So it's gone off to a really, really good start. It leverages in-house technology that we built in Canada, both from the Montreal Exchange and the Toronto Stock Exchange and Venture Exchange. And we had an opportunity to really take the best of both worlds, and then actually, in a greenfield environment for the U.S. ATS, kind of reimagine how we would build it from scratch, to meet the needs of the US participants.
That was really an exciting project for us, Ben, because it gave an opportunity for some of our developer and team members to raise their hand and say, like, "I really want to work on this because this is next-gen technology for matching engine, you know, it's software." And so they did a really, really good job there. It's gone really well. It's a meaningful opportunity for us, even with the kind of modest, kind of market share aspirations that we have. Right now, it's really performing well.
Great. You know, the follow-up, you know, how do you think about porting this back to Canada where you have already very meaningful market share? You know, and is there anything different about Canadian market infrastructure that would affect, you know, how that tech might port back to your, your home market?
Yeah. So initially, and you might recall, I think we even chatted about this going back a year and a bit when we announced we were going to do this. One of the hypotheses we had was, "This is a great market to be in, the U.S. market. We have a right to participate. We have the technology and skills to do it. And so therefore, we're going to go forth with the initiative. And if it works out, we will be able to take that technology and bring it back to Canada and really find a way to now upgrade the matching engine technology both on the Montreal Exchange and the Toronto Stock Exchange." So that is actually now starting.
team members, you know, under the leadership of our new Chief Information Officer, Judy Dinn, Luc Fortin on the Montreal Exchange, and then, Loui Anastasopoulos on the Toronto Stock Exchange side. We're starting to really imagine now how to do that. So I'm excited. It was the hypothesis, and it's really nice when the hypothesis plays out. This is one of those where we were able to build something from scratch and now actually repatriate it back to Canada.
Got it. Switching gears a little bit, but still under that trading umbrella, your post-trade modernization product project went live earlier this year, and there's, you know, now opportunities for SGC and CCMS, which soft launched some new products earlier in the year as well. What kind of capabilities and products are these? Again, maybe for some investors who are a little less familiar, and how should we be thinking about, you know, the revenue opportunity in the back half of the year and into 2026 and beyond?
Okay. I'd like to unpack this. So yes, let's first celebrate. This was a milestone project for us in our 170-year history as a company. To modernize the cash equities and fixed income clearing technology in Canada was no mean feat. And, you know, the fact that we were able to get it done with the help of really active participation from the industry participants is kudos to everyone involved. And absolutely, as you've said, right, like, the fact that that is now done, we have a stable technology platform in which we can build innovative new products that meet clients' needs. You touched on two of them, right? So SGC Notes, obviously, was designed as an alternative to CDOR, and the other one, which folks that might not be familiar with, was CCMS, which is the Canadian Collateral Management System.
We did that with Clearstream. And really, it's to help optimize triparty repo, and collateral management. And that's been really important for our banking partners under the various evolutions of the Basel regime. Obviously, I'm expecting those to continue to generate more meaningful revenue as we move into 2026. And that then gives us an opportunity to quite frankly innovate and meet additional needs that the buy and sell side, you know, are talking to our teams about. So the core was get the technology modernized so we can do what it's intended to do, which is to clear effectively in the Canadian ecosystem. But then now, let's leverage that to innovate and meet additional client needs.
Okay. Great. Moving on to your global insights business, starting with TradePort, you know, you continue to see very strong growth there. You know, first, maybe talk high level about the long-term growth drivers of that business. Like, what's been going so well here?
Yeah. So, the Trayport business, for those in the room that are not that familiar, right? I mean, you know, the drivers behind that growth are client renewals. It's a SaaS-deployed technology environment. So obviously, we have clients, some with one-year, some with multi-year agreements. When they come up for renewal, there's an opportunity for them to, you know, move deeper into the product stack. So, more share of wallet is one of the key drivers. But the other one, quite frankly, is the growth in the actual industry and space that we play. You know, folks often talk about, you know, is Europe getting saturated and kind of where are you? And, you know, we added 82 new client logos. And that's really important because that was in the last year and a half.
Finally, the thing that I'd leave you with is the geographic expansion outside of Europe is important to us because that helps fuel additional growth drivers. That's really been Japan and obviously the U.S. Then obviously asset classes we've spoken about many times Ben is an area of growth for us. We added renewables to the platform a couple of years ago. As we mentioned at our investor day a year ago we would love to add oil to the platform. So the teams are actively working on doing that.
Sticking with Trayport, you know, you have a pretty meaningful amount of market share in Europe. You know, how do you think about reaching a saturation point? It sounds like there's still a lot of opportunity from products, from client renewables. But, you know, is there enough opportunity outside of Europe, in the U.S., in Japan, to sort of offset, you know, that risk? You know, I think that's sort of the question we get a lot is.
Yeah.
Is that growth has been fantastic, how, you know, will it sustain?
Absolutely, Ben. I get that question a lot too. And at the end of the day, I, the way I size it up is, you know, we continue to see expansion in the European marketplace. As I said, you know, 82 new clients in the last year and a half. So that shows you that you know, Europe isn't yet fully saturated. But at the same time, we're focused on other markets, right? And you touched on it. So Japan, to give people an order of magnitude, like, Japan for us is almost the size of Germany and France combined in terms of an opportunity. And then obviously, if you look at what we could do in North America, I mean, it could almost be the same size as Europe, if not bigger. So, they're meaningful, but they're organic growth opportunities, right?
I mean, you know, when we started owning and operating Trayport, we made zero GBP out of the U.S. It's now topping around GBP 7 million per annum. And it's just compounding. So I expect it to get more momentum. We recently signed an important broker in the U.S. environment and so in the US space. So stay tuned. I think that there is enough white space for us to continue to grow. And as we've said, it's a high-growth business, which is high single- to double-digit. It's pretty much always been double-digit since we've owned it. So I think that will continue.
Great. Maybe one last question here. You know, one of the kind of bigger themes we hear impacting some of your peers, some of the other globally traded exchanges is the idea that AI, you know, poses a threat to the sort of data aggregation and distribution model. So how do you think about, you know, the defensibility of Trayport? How proprietary is the data you're collecting? How sticky are the customer relationships? Why, you know, in your view, does that concern not apply to TMX?
Yeah. So that's a great question, Ben. So let's start with the data and the data ownership rights, right? So in the Trayport environment, the trading data, that is, from a broker and a trader, it's proprietary to them, right? It is data that is only visible to them. And so I think the place where AI is going to play a meaningful part in the TradePort ecosystem is really twofold. One, it says, what are the traders and brokers going to do to adopt GenAI tools in their trading strategies, right? And how can we best support that in the Trayport software solution? The second place that I think it will play a meaningful part for us is our speed to deploy software upgrades and software innovations because traditionally, we've really had to use brute force testing technologies, which most people do.
They'll come up with 100 or 150 test scripts for trading or for testing. And then you'll, you know, run the new code through that environment. With the adoption of GenAI, I think, we'll be able to test an infinite amount of test cases on a new code script, which means we'll bring code to market with less bugs and also we'll bring more code enhancements to market at a quicker pace. So that's how I see it playing in the TradePort ecosystem.
Got it. Okay. Moving on to VettaFi. ETFs are one of the fastest growing subsectors of the asset management industry. You know, again, maybe starting with a high-level question, can you walk through sort of the business model for VettaFi and the rationale behind your acquisition?
Yeah. So the rationale was really in response to an emerging client need. We would speak to a lot of folks on the asset management side who would be very keen on creating either thematic or bespoke indices and then launching ETFs on the back of those. And really, we've had a long-standing partnership now, you know, over 25 years with S&P, which is really for our kind of marquee benchmark indices. But really, when we get into the custom bespoke thematic, you know, we needed to be in that space. VettaFi, what attracted us to VettaFi more so than anything else we'd looked at is how VettaFi is really at its core. It's the client success translates into their success. So everything is based on assets under management growing in the client's portfolio.
And to help ensure that their product can grow, we have our digital distribution and analytics services that we add on as well. And so that, for me, was the unique value proposition with VettaFi. And it's really borne fruit, you know, looking at how the VettaFi team can take a fledgling idea to market for an asset manager and then through its network with either etftrends.com or etfdb.com and the thousands of registered investment advisors in the U.S., we can reach out to them, create a podcast, profile that asset manager, and therefore bring the eyeballs to actually be investing in that product. And it's really impressive to see that once again, the hypothesis does play out in reality.
Can you, you know, maybe expanding on that a little bit, you know, can you walk us a bit, walk us through how you think about the VettaFi growth algorithm? You know, how should we think about, you know, AUM growth versus revenue growth? Clearly, some indices have very high value. Some are maybe less, proprietary or less, differentiated. What are the key dynamics here as we think about those two kind of factors?
Yeah. So you touched on it, Ben. I mean, you know, we and let me stand back on our publicly disclosed kind of guidance for that business, right? Which is we define that business as a high-growth business, which is high single to double digits. Ever since we've acquired it, it's been growing on a pro forma basis in mid-teens, you know? So double digits, really good, 15+% . So once again, the hypothesis there is playing out, and really, the growth algorithm goes back to what I touched on earlier, right? It's, you know, obviously linking our revenue to the growth in assets under management is key. Not all of our asset classes have the same assets under management trader fee structure. It's very unique and custom to each, you know, asset class that comes onto the platform.
But then it's how do we actually help them curate? And really, at the end of the day, the asset manager's job is to have their fund perform relative to whatever their stated benchmarking index is. And there's not much we can do for them on that. But what we can do is, to the extent they are performing well, is bring enough registered investment advisors to the product, to kind of open up their aperture to see, oh, that's a good investable product to deploy their clients' money into.
Then last but not least is really using some of the data that we have on search history on etftrends.com and etfdb.com to feed that back to asset managers to say, maybe you might want to innovate in this space because we're seeing a lot of searches for, you know, and with the advent of AI, people are talking about nuclear as an example, right? So, you know, is there a nuclear index that I could invest in? And then we can bring it to an asset manager and co-create that with them.
That's a good segue into my next question. I'm curious, in terms of new index creation, you know, what types of themes are generating the most interest? AI and, you know, power generation makes a lot of sense. What else is sort of, you know, pretty topical?
Global defense is another area, fixed income. So yeah, I would say the tip of the spear is AI. And then from there, certain things trickle out like power, so nuclear, and so on and so forth. And then obviously, it's global defense as I touched on, fixed income and so forth. Those are the ones that are getting the most buzz.
So VettaFi itself has been quite acquisitive. I think you recently acquired ETF Stream, adding some analytical capabilities. You know, can you maybe explain the kind of decision-making process there, buy versus build? And how else are you thinking about inorganic growth for VettaFi specifically?
Yeah. It's a great question. So, you know, VettaFi, we have been quite acquisitive, but we're at the same time been investing heavily in some organic growth initiatives. So given your question is more on the inorganic, yeah, it's been twofold. One is adding more indices and benchmarks to the portfolio and diversifying, hence the Credit Suisse UBS bond index, which really gets us more in the fixed income kind of asset class. And then obviously, when we added index research, what we really liked about index researcher's portfolio is they had a really sizable piece in Europe, and that is next up for us from a growth strategy for VettaFi. But also, they had a really compelling strategic narrative as to how they wanted to grow in Europe.
And one of the pieces that index research didn't have, but VettaFi does have in the US is the digital distribution and analytics capability. So that then created the opportunity when we started looking at ETF Stream because while it's not a carbon copy of what we do in the US, you know, for digital distribution analytics, it has a lot of similarities. And so it's very complementary for the growth of indices and benchmarks and ETFs in the European landscape because they are a very trusted source for many ETF investors in Europe that, you know, if they were in the US, they would go to etftrends.com and etfdb.com. Now they will actually leverage the research and the articles and the depth of knowledge that comes out of ETF Stream.
So it's going to help us replicate VettaFi in Europe like we've done with VettaFi in the U.S.
Another good segue to my last question here on VettaFi. So I was going to ask about, you know, cross-sell opportunities you've been able to execute on between VettaFi and other parts of the business. I think the initial investor reaction was, you know, Canadian trading venue, U.S. ETF manufacturer, index provider. That doesn't at first seem particularly obvious. And so can you talk about what you've seen there and maybe how that might unfold in Europe where ETF adoption is much lower than it is in the U.S.?
Yeah.
But you're obviously there with Trayport and some other parts of the business.
Correct. So that's a great question, Ben. So if I step back, one of the things our CEO, John McKenzie, did earlier this year is we put Peter Conroy, who's been on, who's been operating effectively the Trayport business for us for the better part of, you know, the last seven to eight years, right, and John tapped Peter on the shoulder to oversee all of our global insights business. In fact, back in the day, you and I would have talked about the GSIA business, right? The global solutions, insights, and analytics, and even that is a mouthful, and I even stumbled trying to get it out, so now it's global insights, and Peter is in charge of all three of those businesses, which is VettaFi, Trayport, and Datalinx.
So one of the things that we're seeing is a much better synergy between the three teams on joint sales efforts, much better sharing of CRM data amongst the three groups. And then most importantly is, you know, looking at where certain assets should reside. So a great example was TMX Money, which is effectively a Canadian Yahoo Finance, if you will. We like to think a better version. And that business we've now placed under the management of the VettaFi team, right? Because once again, it's what they do with etftrends.com and etfdb.com. So it's synergistic, and it's paying early dividends. So that's how we're tackling it. But I also think not to underplay the importance of having that common leadership across it all underneath Peter Conroy.
Very interesting. We talked about M&A within VettaFi. Maybe more broadly, you know, your leverage ratio is now back within your target range. You know, is there any parts of the business you think could be strengthened through M&A where it makes sense to buy instead of build? And are you open to pursuing larger, you know, more kind of needle-moving acquisitions?
Yeah. So nice little three-parted event. So let me start first with the deleveraging, right? That's an important part for us. And I hate to just gloss over it. I mean, you know, just over a year and a bit ago, on January 2nd of 2024, we announced the acquisition of VettaFi. Well, we actually announced it in early December of 2023, but we closed the acquisition on January 2nd of 2024. At the time, we took on some bank debt, which we shortly thereafter were able to repay because we refinanced with some long-term debt issuance in the debt capital markets. And at the time, you know, we were outside of our target leverage range, which, to remind people in the room, is one and a half to two and a half times.
That range is simply there to guide us during periods of, you know, normal course, kind of small tuck-in kind of M&A, and just good balance sheet management. But when we have opportunities to, you know, do step function acquisitions, the first one really was Trayport back in 2017, 2018. We went outside of that range in a meaningful way, very quickly delevered. We did the same with VettaFi. When we announced it, we went outside of our range. We did say we would get within the range by the end of 2025. As you know, when we ended Q2, we were right there knocking on the door, and now we're well inside the range.
So, that's the story on the leverage, and it's really a testament to the firepower of our cash flow generating business, but quite frankly, the discipline of both the board of directors and the senior management team on managing the company really well. So that's the first part. Then we talked a little bit about M&A, and some folks, you know, often ask me, and you touch on the word strategy, right? Like M&A strategy. And we, I like to always remind folks that, you know, we have a strategy for TMX, which is to grow the business. We set out, you know, our high-growth businesses, our strong-growing businesses, our market growth businesses. But really, we, you know, we want to grow the revenue as a strong revenue growth, which is five plus, and we want to grow EPS double digits.
And, you know, to do that, you know, we can invest organically, or we can partner with someone, or we can invest inorganically. And so the choice really for us is, does this help accelerate the strategy? And so we don't have an M&A strategy. We have a strategy that's for TMX. The M&A opportunities are really accelerants, or things where we say we probably are better buying this than building it, right? Or partnering with someone. So that's kind of the best way that I kind of frame it up. And then, you know, you asked at the end there, would you be willing to pursue larger acquisitions?
We said this when we announced VettaFi, you know, back in December of 2023, that while we want to get within our target range, to the extent another business that helps accelerate the strategy that would, you know, push us back outside of the range, we would entertain it. So had something occurred, that was an accelerant for the strategy in six months, 12 months ago, we would have done it too. We just didn't have anything of that size or nature. You know, so yes, we are very interested in acquisitions of all sizes, and quite frankly, most of the geographies in which we operate, which is really Canada, U.S., I think North America, and then Europe and Asia Pacific as kind of the guideposts for now.
Let me switch gears a little bit. Let's talk about digital assets. So crypto has been a very popular topic for your U.S. counterparts given the, you know, the shifting tone from our regulators here. I think you'd previously considered listing spot crypto, but given the current market dynamics, is there an opportunity to revisit this? Or are there other opportunities, whether, I don't know, market infrastructure, tokenization, or tokenized equities, you know, something you're thinking about? And if so, why? You know, how are you thinking about kind of a wide range of opportunities?
It's a great question, Ben. So, I think I'm going to start with a statement which is really we need to see how it evolves with the new administration and the SEC in the U.S. first. I think Canada will be a FOSS follower, and therefore TMX will be a FOSS follower. But it really needs to, you know, first we need to see, you know, how tokenization of securities plays out, right? I really see tokenization of assets that are non-securities as defined in the SEC, you know, rulebook, as very, very relevant for so many folks in various different jurisdictions and marketplaces. We don't play in that space. We know we're a securities, you know, operator. So I'm very, very curious to see how it pans out in the U.S.
And then I think that the OSC and others in Canada will be fast followers, depending on where the U.S. ends up. I also think that there is a difference in nature of the investor in Canada versus in the U.S., a little bit more risk-averse north of the border, a little bit of a more skeptical view. So we'll have to wait and see. And then you did touch on, you know, a couple of years ago we did chat a little bit about, you know, something we were able to do, in response to the banks, you know, asking about, you know, what's going on in crypto and so on and so forth. And we did work on a tentative solution, but it was actually driven by a client demand, right?
It was the five or six large Canadian banks approaching us and saying, we're getting questions from some of our wealth advisors that have maybe, you know, got clients that are, you know, a little bit more mature in their life cycle. And either their children or family members are saying, you should get into crypto, mom and dad. And so they talk to their financial advisors, and the financial advisors are therefore bringing it up the chain in the various banks to say, we should find a way to meet this client need. And so we started working on a solution with both our trust business and our clearinghouse CDS, that really would work for the banks.
But then unfortunately, you know, a year and a bit ago, we had some of the missteps with FTX and others, and that kind of took the foot off the gas. So we're ready and willing to support the Canadian, you know, sell side, you know, firms, whether it be in the investment solutioning side or, you know, in innovation. But it's really going to be driven by them. And there's a two-step process here, which is really where does it go in the U.S.? How does Canada follow? And then will our clients actually have a demand for it?
Maybe one more question on kind of new markets. I don't think you guys have talked about, but sort of plays into the retail crypto theme in the U.S. We've seen tremendous growth in prediction markets. Is there, you know, you mentioned that Canadian investors are generally more risk-averse. Wouldn't surprise me if adoption of those kinds of, you know, trading tools is lower in Canada than it is elsewhere. But how do you think about that as a future business line? Is there appetite? Is there a role for TMX to play or perhaps better left to the fintechs that are kind of driving that kind of trend?
I think the short answer is it depends. And really what it depends on is there enough client demand in the Canadian retail space that needs to be met, right? And if so, we're well positioned to meet it if the opportunity is meaningful. You know, so that's why I say it depends, right? We are not going to be the leading innovator in that space in the Canadian marketplace. But I will live with it, we will be a fast follower if, and it's a big if, the rulebook works and the Canadian investor public is demanding and calling for it. Because then we have the right to play, we have the skills to play, and then there's the demand, which is critical.
Maybe following up, you know, kind of retail in general, that has been a very strong theme in the U.S., stocks, options, crypto. It's been more modest in Canada, as we've been talking about. What are you seeing there? Is retail engagement? Are you seeing any sort of changes in terms of engagement with, you know, the Montreal Exchange, anything like that? Are there kind of retail opportunities for TMX? There are certainly some unique aspects to the markets with, you know, the venture exchange that kind of open up some unique opportunities. But, you know, how are you thinking about how that theme may play out in Canada?
It's a little bit of what I did touch on earlier, Ben. Like I think, you know, the Canadian retail investor is somewhat more conservative, and therefore risk-averse. So, you know, we saw some of the phenomenon in the U.S. with some of the stocks where retail investors would buy options because they couldn't afford, you know, to take a meaningful position. So they would buy retail options, you know, in those stocks. We didn't really see that in Canada. It's starting to emerge. But I think it's a more sophisticated investor with a smaller base and a much more targeted set of cash equities, where they would look at those options. So it's another one of those, let's wait and see how it plays out.
Once again, if the demand is there, Ben, we have the skills and the capabilities to meet the demand. It's just, you know, listing product on the Montreal Exchange that doesn't trade, that is highly liquid, it doesn't help, right? It doesn't help the person who's bought it and now wants to sell and so on and so forth. And we are always willing to create markets through market-making programs and other incentives if there is enough demand for that market to be created. So it's almost like a bit of a chicken and the egg situation. We need to see the demand and then we will very, very quickly respond versus let's create the product and hope the demand just follows.
Right, and coming back to data links, we talked about TradePort and VettaFi. We hadn't touched on that one. You know, can you first maybe talk about the latest trends you're seeing there? You know, I think your revenue growth picked up kind of nicely in Q2, even as the your market data subscribers metric kind of declined. You know, what's driving the growth in that line?
So I think it's a couple of things. One is colocation is obviously helping in Datalinx. There is more demand for colocation services. But the other thing, quite frankly, is the fact that we're touching on some of the cross-sell opportunities. There's more introduction given the fact that VettaFi is now part of the TMX family and therefore opportunities for us to be connected with certain asset managers who would rather buy data sources directly from Datalinx. So that's underlying a little bit of the driver. It's also the fact that we have, you know, over 50%, of the revenue in that business is coming from US dollar denominated contracts. So there is a foreign exchange benefit that we get there too, Ben. That's kind of the high level as to what's going on in Datalinx.
Got it. And maybe, maybe lastly, just following on data links, you know, how are you thinking about additional revenue or product opportunities? Should the longer-term growth sort of follow broader Canadian markets, maybe with some pricing power? Are there other ways to drive growth, new product creation?
Yeah. This is a great question, so you know, one of the things that I think is a huge opportunity for our data links business is thinking about those additional data sets that would be complementary, with the trading data that we really have as the kind of core bread and butter in that business. And so we acquired a company, called Wall Street Horizon a couple of years ago. And that was important because they are known for their ability for high-quality corporate action, corporate action data. And so now what the team are really focused on is what are these other data sets that are out in the marketplace that aren't trading data but are complementary to trading data? and how can we actually marry that up with our data?
In our capital formation business, we recently acquired a company called Newsfile that does news dissemination services. Part of the things that the teams are working on is, okay, obviously in the Newsfile business, it's important to get out on time in a quality way the press releases for those issuers, some of which are actually private, right? And then how can we actually not only do that, but create the data model behind that to create structured data on those corporates that are issued, that are publicly traded, marry up that data with other data sets? One of the things we're thinking about is a lot of individuals spend a lot of time going and getting, you know, AIF data, you know, various different, you know, executive compensation data points.
I would say in the generalized kind of marketplace, because I use this a lot with my team as we're doing some analysis on the finance team, the data is average, right? I got to double-check sources. Every once in a while they show me a chart and I say that doesn't make sense. And sometimes I'm wrong, but oftentimes it's the data was actually wrong, right? And the team come back and say, "Oh yeah, we've checked it in the annual report, so we shouldn't have pulled it from that data source." And so I think there's an opportunity for the data links team, and that's part of their strategic roadmap right now, is they're looking at these other data sets out there.
And the challenge that we have as we look at these other data sets is we need to be able to do it at the quality that has got the TMX label attached to it. If we bring in other data sets, Ben, that are just as poor quality as others, it will actually, you know, hurt the value proposition of the data link, data set. So, we spend a lot of time with our Newsfile team, spending a lot of time with our Wall Street Horizon team, making sure that, you know, we have quality, marrying that with the TMX data links, you know, data. And then, as I said, looking at these other pockets.
And I won't give you what those pockets are because some of them are active files as we're talking to people about whether or not they would like to join the TMX dataset family.
Great. Well, we're nearly out of time. We'll leave it there. But David, what a pleasure to have you with us.
Yeah.
Thank you so much.
Thanks, Ben. Awesome. Thank you.