Numerous candidates could take the lead as TMX Group head plans his retirement

TORONTO – An exhaustive search for a new leader of the Toronto Stock Exchange is underway with some old as well as new faces expected to be among those looking to replace Thomas Kloet, who is retiring this summer.

Kloet announced late Monday that he will step down as CEO of the TMX Group (TSX:X), the exchange’s parent company, at the end of August. The TMX board has formed a search committee to find Kloet’s replacement and the company said work would begin immediately.

The move opens up a number of possibilities for the future direction of Canada’s biggest stock and derivatives exchange in an age of heightened competition and new technology.

“They’re going to want somebody who understands electronic markets, and they’re not going to want somebody who’s the old guard,” said Doug Clark, managing director of research at ITG Canada.

“The whole nature of markets has evolved.”

Six years ago, when Kloet took the reins at the TMX Group, he faced an industry headed into widespread consolidation, which included a merger of the TSX with the Montreal Exchange in 2007.

“Tom steered the ship through a very challenging period and TMX has made it out to the other side in relatively good shape,” said CIBC World Markets analyst Paul Holden.

However, the exchange has since faced a slowdown in new listings and market capitalization among existing issuers has also fallen, which has negatively affected revenue growth.

Kloet, a seasoned American executive won the high-profile position over Montreal Exchange head Luc Bertrand, who had been considered a top candidate for the vacant position because of his past experience building the Montreal Exchange before it was taken over by the TMX.

By hiring Kloet, the TMX Group sidestepped political overtones surrounding the takeover. The deal touched a nationalist nerve in Quebec, where the Liberal government fought off Parti Quebecois demands to block the transaction.

However, Bertrand could return as a potential suitor for the new vacancy.

In 2011, he became the public voice of the Maple Group Acquisition Corp., a group formed by some of Canada’s biggest banks, which submitted a $3.6-billion unsolicited offer for the TMX Group that it said would ensure the exchange maintained Canadian ownership.

The Maple Group thwarted a lower offer from the London Stock Exchange.

Other internal candidates considered major contenders for the top position include chief financial officer Michael Ptasznik, who has been with the TSX in various roles for 18 years.

Other candidates could include Larry Leibowitz, the former chief operating officer of the New York Stock Exchange’s parent company, who exited his job when the NYSE Euronext was acquired last year.

Kloet helped oversee the expansion of TMX Group with new offices in London, New York, Sydney and Beijing and a more than doubling of its number of international companies listed.