Pure Trading and CNQ Respond to TSX Legal Claim

Alternative trading exchange says no basis to TSX allegations

Toronto, Ont. (July 05, 2007) – Ian Bandeen, Vice Chairman and CEO of Canadian Trading and Quotation System Inc. (CNQ), said today that the exchange strenuously rejects allegations contained in a law suit filed last month by the TSX.  The suit claims damages and other relief arising out of alleged copyright and trade-mark infringement.

“The TSX has been aware since 2005 of our plans to build and launch the Pure Trading marketplace, and has been aware since 2003 of our use of the STAMP protocol for trading on the CNQ stock exchange”, Bandeen said. “Until recently, the TSX has cooperated with CNQ, the participating dealers and the vendors as we went through a full year of testing with the Pure Trading system. We have been completely transparent with our efforts.”

“The timing of this action is no coincidence.  Pure Trading is now weeks away from launch following a series of successful tests supported by the dealer and vendor community in North America. The fact that the TSX would initiate a baseless legal claim at this time suggests to our group that they are trying to stifle competition. CNQ and Pure Trading believe that all of the TSX’s allegations are without merit, and that all of the claims will be dismissed.  This development will have no impact on our imminent launch,” Bandeen said.

The main issue is the computer protocol language, STAMP, used for many years by dealers and vendors to connect to Canadian stock and derivatives exchanges.

This protocol was developed more than ten years ago by the industry to facilitate cost effective connectivity to multiple marketplaces in Canada.  In the words of the protocol document itself:
”the most important aspect of STAMP is that the business messages defined will be able to support trading on all of the Canadian Exchanges. Each exchange will ‘speak the same language’, which allows a Member Firm to create a computer interface once, and be able to route orders to one Exchange as easily as any another."

"We believe that this is simply one of a number of recent tactics to try and forestall competition and to thwart the significant collective endeavours over the last year by the Canadian trading community as they prepare for the benefits of a multi-market trading environment," Bandeen commented.

Ron Dimock, a senior partner of Dimock Stratton LLP and one of Canada’s leading intellectual property counsel, has been retained to represent CNQ and Pure Trading in the matter.

“While we regret that the TSX has chosen to interfere with competition in this way, we sincerely hope that this matter can be brought to court expeditiously,” Bandeen said. “We are extremely confident of our position and we will not be thrown off course by even one millisecond as we proceed to be the first to introduce a continuous auction market for exchange listed securities that is better, faster and cheaper than what exists in Canada today.”

About Pure Trading and CNQ: CNQ was recognized as a stock exchange by the Ontario Securities Commission in May, 2004 as the first new Canadian stock exchange in over 70 years and currently has over 90 listed securities.  In 2006 it obtained approval to launch Pure Trading, an alternative market which provides a better, faster, and more cost efficient trading venue for equity securities listed on other stock exchanges in Canada.  There are currently over 55 Canadian investment dealers approved for direct access to both Pure Trading and the CNQ stock exchange.

-30-

For more information please contact:
Lida Preyma
Director, Business Development & Marketing
Pure Trading
416.572.2000 ex 2285
[email protected]

Media enquiries please contact:

Susan Reisler

416 342-1843

[email protected]