Canada’s derivatives exchange, the Montréal Exchange (MX), on Monday extended its opening times as part of the next phase of its trading hours initiative, in a move said to have Australian superannuation funds central to its consideration.
The MX will now be open for almost 24 hours a day, allowing investors in Australia, as well as across APAC, greater opportunity to manage their exposure to Canadian markets and execute cross-market strategies.
Luc Fortin, president and chief executive of MX and global head of trading strategy at TMX Group, revealed to InvestorDaily just how critical Australian investors have been to the growth of the MX.
“Canada has been growing strongly as a go-to international market – foreign net inflow in Canadian securities has grown by two-fold over the last three years,” he said.
“Australia has been an important part of that growth.”
Mr Fortin highlighted super’s central role in Australia’s significant contribution.
“We very much made this decision with Australian superannuation funds at the centre of our thinking,” he said.
“This group of investors have been strong users of our products for many years, and have expressed to us their desire to do so within their own timezone, to best manage their risk and exposures.”
According to Mr Fortin, Canadian derivatives have long been “instruments of choice” for Australian institutions, including super funds, for both hedging and diversification practices.
“Being able to use Canadian derivatives to manage risk in real-time within the Australian trading day will allow super funds to enhance their risk management activities, as well as adding depth and liquidity to both Australian and Canadian markets which benefits all investors,” he said.
Mr Fortin also highlighted how super assets greatly outweigh the volume of investable assets locally, driving the importance for the industry to have access to international diversification opportunities.
The MX launched its extended trading hours initiative in 2018, extending its opening hours at the time to link up with London’s trading.
Following Monday’s news, MX trading sessions will now open at 8:00 p.m. (t-1) ET (10:00 a.m. AEST) (with a 7:30 p.m. [t-1] ET [9:30 a.m. AEST] pre-open) and close at 4:30 p.m. ET (6:30 a.m. AEST).