Proposed merger between the Montréal exchange and the Toronto Stock Exchange: The Caisse supports the project but would like the AMF to obtain certain undertakings from the new TMX Group

On December 10, following the announcement of the proposed merger between the Toronto Stock Exchange and the Montréal Exchange to form the TMX Group, the Caisse de dépôt et placement du Québec issued a press release stating that while it found the proposal interesting, it had a number of concerns.

After examining the documents made public since then and after obtaining additional information, the Caisse has concluded that this project offers advantages for all the parties and therefore generally stands behind its initial endorsement. The Caisse has a stake of about 8% in the Montréal Exchange.

However, the Caisse would like the Autorité des marchés financiers (AMF) to obtain formal undertakings from the TSX Group with regards to certain specific aspects such as the continuity of operations in Montréal and the governance structure of the new TMX group.

The Caisse also undertakes to support the new group as both a client and shareholder with a view to making it a stronger, more viable institution in an intensely competitive market.

Business continuity in Montréal
Over and above the existing undertakings of the proposed transaction, the undertaking of the TSX Group to the AMF stating that the trading of derivatives and related products will remain in Montréal should be clearer and firmer. In fact, the Caisse believes that the TSX Group should also provide an undertaking to the AMF to the effect that all future derivatives activities, initiatives and developments in Canada or elsewhere will be under the responsibility of the Montréal Exchange (which will become a division of the TSX Group) and will be managed from Montréal.

Governance structure of new TMX Group
The Caisse believes that the undertakings regarding the appointment of directors should include the obligation to appoint directors who are residents of Québec and who have relevant derivatives experience and expertise. The AMF should insist that the TSX Group (and then TMX) have its board of directors define an expertise and experience profile for its members. AMF would have to approve this profile and sign off on any changes.

Break fees
The break fee for the proposed merger is $45.7 million. While it believes that such provisions do not always serve the interests of shareholders, in this particular situation, the Caisse is not making the fee a reason to oppose the merger.

Documentation
The brief, which will be filed by the Caisse with the Autorité des marchés financiers, is appended to this press release.

The Caisse de dépôt et placement du Québec is a financial institution that manages funds primarily for public and private pension and insurance plans. As at December 31, 2006, it held CA$143.5 billion of net assets. One of the leading institutional fund managers in Canada, the Caisse invests in the main financial markets as well as in private equity and real estate. For more information: www.cdpq.com.