The Deal That Isn't Done Yet, and the Exchange Nobody Wanted

The competitor title says Cboe has completed its sale of Cboe Australia to TMX Group. The problem is that the deal isn't done. It was announced in April, it's still subject to regulatory approvals in both Australia and Canada, and the two halves are expected to close separately whenever local regulators get around to it.

But the inaccuracy of that headline points to something stranger. Cboe Australia was the regulatory project that was supposed to break up the ASX monopoly. In October of last year, ASIC - Australia's securities regulator - approved Cboe Australia's application to become a full listing market, putting it in direct competition for IPOs with the ASX and the smaller National Stock Exchange. Then, within weeks, the new competitor announced it was selling itself.

That's the weird part. And it's the part that explains the whole machine.

The basic point is that an exchange is just a toll road with compliance requirements, and the economics of being the second toll road are terrible unless the regulator actively subsidizes your existence. Cboe Australia was ASIC's answer to an ASX that had grown comfortable sitting on roughly 80 percent of Australian equity turnover, collecting listing fees, clearing fees, and market-data rents from a market with no real alternative.

So ASIC did what regulators in monopoly markets do: it waved a second player through the gate and told everyone to compete. Cboe Australia - formerly Chi-X Australia, originally launched in 2011 - now handles about 20 percent of Australian equity market turnover, roughly $2 billion of trades each day. That's meaningful competition on the trading side.

But on the listing side, where the real money lives, it's a different story. Cboe just got its listing license in October 2025. The revenue pool for combined Cboe Australia and Cboe Canada was about CA$87 million in 2025, with adjusted EBITDA of CA$25 million. The entire package - both countries, both exchanges - is being sold for US$300 million. That's roughly 4.7 times revenue and 16.4 times EBITDA, on businesses that are still building.

Cboe originally paid about US$350 million to acquire the Canadian assets - MATCHNow in 2020 and the NEO Exchange in 2021. So they're selling at a haircut. Not a catastrophic one, but a clear enough signal that the math didn't work the way they expected.

On the buyer side, TMX Group is the parent of the Toronto Stock Exchange and the Montreal Exchange - essentially the dominant exchange operator in Canada. It is buying Cboe Canada, which handles roughly 12.5 percent of Canadian equity volume, from Cboe. That means TMX, already the incumbent, is acquiring the only meaningful competitor in its own domestic market. TMX framed this as reducing "cost and complexity" for Canadian participants. In exchange-operator language, that's a polite way of saying they're consolidating a fragmented marketplace so one set of plumbing does the work.

The Australian piece is where the mining-finance pitch lives. TMX controls the TSX, which is one of the world's largest venues for resource-sector listings. Cboe Australia gives them a second Australian trading venue and a listing platform that ASIC literally just approved. TMX's CEO described it as bringing together "the world's leading mining and energy transition financing ecosystems". The idea is that a Canadian exchange giant running an Australian alternative exchange creates a cross-border listing-and-trading playground for miners and commodity companies that list on both sides of the Pacific.

That's a real incentive. It's also a regulatory risk. ASIC said publicly that it would "seek to expedite" its review of the deal. But ASIC also made clear that competition in Australian equity markets is a key priority and that Cboe has "played a critical role in delivering" innovation and lower costs. Selling Cboe Australia to a Canadian monopoly operator doesn't exactly advance that goal, even if TMX isn't the ASX. The Competition Bureau in Canada faces a similar problem: TMX is already dominant at home, and this deal removes the one exchange that competes with it.

Both deals remain subject to approval. That's the part the "completed" headline got wrong, and it's not a minor detail - it's the part where the actual economic outcome gets decided.

On Cboe's side, the sale is the clearest signal yet about where the company is steering. In the deal announcement, Cboe's head of corporate development talked about "the accelerating adoption of digital assets and tokenization, and the evolution toward 24x7, on-chain markets with atomic settlement". This isn't boilerplate. Cboe has been publishing research on digital assets and tokenization, promoting its cryptocurrency derivatives suite, and positioning itself as the bridge between traditional options infrastructure and blockchain-based settlement.

The sell-off of Australian and Canadian equities exchanges is the funding mechanism for that pivot. Equities trading venues in smaller, competitive markets generate steady but slow growth. Crypto derivatives and tokenization infrastructure are speculative bets, but they're the kind of bets that command attention - and valuation premiums. Cboe's stock sits around $310, which is a market telling you it's buying the future-pitched narrative rather than pricing the steady exchange-toll-road cash flow.

The simplest model is this: an Australian regulator created competition by licensing a second exchange. The second exchange built meaningful trading volume but never cracked the listing-fee moat. Its parent company, wanting to fund a crypto-derivatives pivot, put the whole package up for sale. A Canadian exchange monopoly bought it, consolidating its home market while making a long-term bet on mining-sector cross-border listings. Nobody in that chain has a bad incentive. The question is whether the regulators in both countries decide that consolidation is a price they're willing to pay.

The deal isn't done. That's the one thing the headline got wrong. It's also the most important remaining variable: the outcome depends on whether ASIC and Canada's Competition Bureau think the market is resilient enough to absorb another round of exchange consolidation.