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Good morning, ladies and gentlemen, and welcome to the TMX Group Limited Q2 2021 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, August 5, 2021.I would now like to turn the conference over to Paul Malcolmson. Please go ahead.
Well, thank you, operator, and good morning, everyone. I hope that you and all of your families are staying well and safe. Thank you for joining us this morning for the Second Quarter 2021 Conference Call for TMX Group. As you know, we announced our results late yesterday, and a copy of our press release is available on our website, tmx.com, under Investor Relations. This morning, we are once again joining virtually and have with us John McKenzie, our Chief Executive Officer; and David Arnold, our Chief Financial Officer, joining for his first earnings call at TMX. Welcome, David. Following opening remarks, we will have a question-and-answer session. Before we begin, I want to remind you that certain statements made on today's call may be considered forward-looking. I refer you to the risk factors contained in our press release and reports that we have filed with regulatory authorities.And with that, I'd like to turn the call over to John.
Well, thank you, Paul, and good morning, everyone. Thanks for dialing into the call today to discuss TMX Group's financial performance for the second quarter and first half of 2021. As people here in Canada and across much of the world work towards the next normal phase of life during the COVID-19 pandemic, I want to start by wishing everyone listening in this morning, the very best of health on behalf of all of us here at TMX.Now as Paul mentioned, we announced our Q2 '21 results last night, and I trust many of you had the chance to read through our financial statements and related disclosures. And today is an exciting day for us as we welcome a new voice to our quarterly discussion, David Arnold, our new Chief Financial Officer. David joined the organization at the beginning of June and has hit the ground virtually running in many respects, a climb at engaging himself to TMX and his new role, and getting to know the great finance team we have here.I will turn the call over to David in a few minutes, and he will take us through the strong financial results for the quarter. But I want to focus my comments this morning on TMX performance throughout the first 6 months of 2021 and the progress we are making in some of our priority initiatives as we move back into the back half of the year.TMX's operating results reflect some of the considerable six segments in our core listing franchise. The benefits of TMX' long-term diversification strategy and a demonstrated ability to leverage the depth of capabilities across the organization to add value to the markets we serve and ultimately, to achieve growth. And while we operate in an industry subject to sudden and unpredictable change, a key and consistent factor contributing to TMX's success this year, as much as any other in our long history at the center of Canada's capital markets, is the unwavering commitment of our people. Since the beginning of the COVID-19 pandemic, people in all walks of life have faced considerable challenges in their efforts to balance remote work and family life. And I'd like to recognize the fantastic efforts of TMX employees, staff working in our offices and at home to adapt to the increased workload of a busy market and ensure we continue to provide excellent service to our clients here in Canada and around the world.Turning now to our results in the first half of the year. Revenue was $497 million, an increase of 13% from the first half of 2020. Diluted earnings per share grew 27% or 24% on an adjusted basis compared with the first 6 months of 2020. Overall growth was driven by strong performances across several of our business areas, including capital formation, equities and fixed income, trading and clearing and Trayport.Total operating expenses increased 1% from the first 6 months of 2020, largely due to higher costs related to our short-term employee incentive plan and sales commissions and increased severance costs. These increases in expenses were somewhat offset by the net litigation settlement costs incurred in the first half of last year.Now, taking a closer look at performance of our business areas. Revenue from capital formation was a $130.3 million, an increase of 48% from the first half of 2020, driven largely by a surge in the number of issuer financings and financing dollar raised on Toronto Stock Exchange and TSX Venture Exchange. We are in the midst of the strongest IPO market in 15 years, with 35 corporate IPOs on Toronto Stock Exchange and TSX Venture Exchange in the first half of the year. In total, we had 247 new listings, a 79% increase from the first half of last year. And TMX exchanges ranked #2 in the world in new listings among our global peers through June 30, according to data from The World Federation of Exchanges. And momentum in companies coming to market has continued through the early weeks of summer. Entrepreneurs in Canada and around the world are leveraging our public markets to access growth capital and the profile of visionary companies choosing a public path to growth is as broad as ever.In all market conditions, it is crucial to the long-term success and competitiveness of our marketplace, that we continue to seek out adaptive ways to address the needs of businesses of all sizes and in various stages of their development. And a look at a few of the additional key stats for the first half provides some helpful context as to the broad scope of the success.In terms of equity financing on TSX and TSX Venture, we had our best first half in history, with a combined total of $34.7 billion raised by their insurers, a 101% increase over the first half of 2020. And for context, issuers on the two exchanges raised $42.8 billion in the entirety of 2020. Total combined TSX and TSX Venture market capitalization reached $4 trillion for the first time in our history, including a $100 billion on TSX Venture, also an all-time high. And TSX Venture also graduated 19 companies to the Toronto Stock Exchange through June, more than any of other first half in the last 10 years.And we're seeing encouraging signs that our recent efforts to improve an important program geared to serving this critical foundation of our 2-tier ecosystem is working for our clients. At the beginning of the year, TSX Venture Exchange revamped its signature Capital Pool Company or CPC program, which is a unique listing vehicle that has accounted for nearly one-third of the new TSX Venture Exchange listings in the past 10 years. The changes in the policy were designed to increase flexibility, reduce the regulatory burden, and improve the overall economics for prospective issuers. And the early returns are very positive. In the first half of the year, TSX Venture listed 37 new CPCs, a 131% increase from the first half of 2020.And in addition, our other issuer services revenue also increased, increasing by $7 million or 53% from the first 6 months of last year, reflecting increased revenue from TSX Trust due to higher transfer agent fee revenue and increases in corporate trust and recoverable revenues. Our TSX Trust team has been handling more files than ever as increased market activity has boosted demand for our corporate trust transfer agent registered and registry plan services. And the expected close of our AST Canada transaction announced in September of last year, will further augment our ability to serve the needs of companies across the marketplace, broadening the scope and scale of its service offering.Now I'd like to turn to equity trading. Revenue from Equities and Fixed Income Trading and Clearing was a $126 million in the first 6 months of 2021, up 7% from last year. The year-over-year growth was driven by an increase of 88% in TSX Venture Exchange volumes and 43% higher volumes on TSX Alpha, partially offset by an 11% decrease in volumes on the Toronto Stock Exchange. Trading activities surged on TSX Venture throughout the first half, reflecting increased investor interest and a diverse set of early-stage companies listed on our world-leading junior market.The S&P/TSX venture composite index was up 55% year-over-year through the end of June, ranking among the top-performing markets in the world. And across our core equities markets, we continue to be committed to enhancing the TMX trading client experience. Our equities trading team continues to work with clients and stakeholders to ensure our markets remain responsive, innovative and globally competitive. Our key upcoming initiatives remain on track. The launch of our new improved TSX market on close facility, or MOC, is also due to launch on schedule this fall. The MOC facility plays a crucial role in Canada's markets, setting the official closing price for eligible Toronto Stock Exchange and selected TSX Venture Exchange-listed issues and facilitating benchmark portfolio rebalancing.And we are especially proud to bring the revamp mark-to-market this year. As this initiative is the result of dedicated collaborative effort with our industry partners to better align our model with global peers and provide clients with increased transparency and consistency of execution. And TSX Dark, Canada's fastest-growing dark pool, is set to launch trading and conditional orders in the fourth quarter of 2021, a move designed to increase functionality and further attract liquidity. The additional -- the addition of conditional orders is the next step in the TSX Dark client engagement strategy as we continue to explore ways in which we can augment and adapt the functionality on TSX Dark and build on its reputation as a premier dark pool in Canada.Now moving on to Trayport. Revenue for Trayport was $73.8 million, a 10% increase from the first half of 2020, driven by a 7% growth in the average number of subscribers. The average number of trader subscribers was up 7% from the first half of last year, as was average total subscribers. Trayport continues to add to its capability to serve the data and analytical needs of traders, portfolio managers and analysts across the rapidly evolving global energy market. In June, Trayport completed the successful acquisition of Tradesignal, a leading producer of rule-based trading and technical chart analysis software. Now integrated into Trayport's dual network, the addition of Tradesignal brings enhanced charting and analytics features to Trayport's primary client offering, along with opportunities for clients that test both short and long-term trading strategies.Revenue from derivatives trading and clearing was $71.4 million, up 1% from the first 6 months of 2020, including a 3% increase in revenue from MX and CDCC. Overall MX volumes increased 12% when compared with the first half of last year. But revenue growth was somewhat offset by a lower revenue per contract due to an unfavorable product mix. Within the overall growth in volumes, we are encouraged by the keen investor interest we are seeing in specific products, including single-share futures with average daily volumes up to 32% over the first 6 months of last year. A 23% growth in equity and ETF options, an 8% volume increase in the interest rate derivatives. Overall open interest at June 30, 2021, was also up 23% from last year.Now looking forward, MX's 30-year new government of Canada Futures contract, or LGB contract, is on-track to launch by year-end. And together with the recently launched CGZ, our two-year government of Canada contract, the LGB will complete MX's client-driven initiative to create liquidity points along the entirety of Canada's listed yield curve. And the next phase of MX extended hours initiative remains on-track as well as we prepare for the launch of trading on Asian hours in the second half of this year.Now in closing, as we move into the back half of 2021 and continue to adapt to evolving conditions in our operating environment and in just about every facet of life, I want to clearly reaffirm TMX's commitment to serving clients across our business throughout our market ecosystem and around the world with excellence. And we have recently taken on some important steps to enable TMX to fulfill that commitment today and long into the future.Earlier this year, we embarked on an enterprise-wide exercise to define the high-performing culture we want TMX to be known for, with a new purpose statement and values to guidance in the way we do business with both our stakeholders and each other. As part of that process, we gathered input from employees across all levels, locations and businesses, and brought together senior leaders to work through the insights and engage in an open and productive conversation about how to realize our potential and fuel the future success of TMX. And we're excited to introduce our new purpose statement and values that will serve to shape the high-performing culture we want to continue to build together.Our purpose is very clear. We make markets better and empower bold ideas. It's a rallying cry from all of us here at TMX. It's foundational to our business strategy and is intrinsic to who we are. And our values are focused on what matters in how we deliver. Client centricity, we put clients at the heart of everything we do. Courage, we act with courage to be bold and to innovate, and trust, we operate with unyielding respect and integrity, fostering inclusiveness and belonging. Now enacting a culture shift doesn't happen overnight. It is a journey. And what I find most encouraging as we move forward in this journey is the pride and dedication TMX employs bring to their roles every day. These core attributes are key contributing factors to our success today and crucial to ensuring TMX's success into the future.And with that, let me turn the call over to David.
Thank you very much, John, for the kind introduction, and warm welcome. I'm very excited to be part of the team. Over the last couple of months, I've had the opportunity to work with such a talented and diverse team here at the TMX. And over the next couple of months, I look forward to meeting and getting to know those analysts and investors I've not yet had the chance to meet.Turning now to our financial results. Q2 '21 was a very strong quarter with double-digit revenue and earnings per share growth. There were revenue increases from capital formation, derivatives trading and clearing, global solutions, insights and analytics, or GSIA, and CDS, partially offset by lower equities and fixed income trading revenue. Operating expenses were down 6% over Q2 '20, mainly driven by approximately $12 million of net litigation settlement costs in Q2 of last year.Our adjusted EBITDA margin increased to 63% for Q2 '21. Diluted earnings per share grew 15%, reflecting the higher revenue and lower expenses, and included a $19.8 million increase in Q2 '21 income tax expense relating to a change in the future U.K. corporate income tax rate. Our adjusted diluted earnings per share increased by 25% in the quarter. Our share of net income from BOX in Q2 '21 increased by approximately $5.9 million, reflecting higher BOX revenue, driven by a 140% increase in volumes compared to Q2 '20.The revenue growth in capital formation was primarily driven by higher additional listing fee revenue on both TSX and TSX Venture in Q2 '21, relating to both an increase in the number of financings and the total financing dollars raised. The increase on TSX reflected a 66% increase in the number of transactions billed at the maximum listing fee of $250,000 as well as a 19% increase in the number of transactions billed below the maximum fee. Sustaining listing fees also increased in Q2, reflecting an increase in the market capitalization of issuers at December 31, 2020, as well as an increase in new listings in the first half of 2021. We now estimate that the increase in sustaining listing fee revenue will be approximately $7 million for 2021, up from the previous estimate of approximately $5 million. There were also increase revenues from TSX Trust and initial listing fees in Q2 '21 compared to last year.Derivatives trading and clearing revenue grew by 13% from Q2 2020 to Q2 '21. While volumes on MX were up 24% compared to last year, there was lower revenue per contract, reflecting an unfavorable client mix. In addition, there was a decrease of approximately $600,000 in revenue, mainly relating to our agreement to provide transitional services to BOX, which ended in Q2 of last year.Revenue in our GSIA segment was up 4% over Q2 2020, with increases from both Trayport and our traditional data business. Revenue from Trayport was up 9% in Canadian dollars or 8% in Sterling. The increase was driven by a 9% growth in total subscribers in Q2 '21 compared with Q2 2020. Revenue in our traditional data business was up 1%, driven by increases in both professional and non-professional subscribers, usage-based quotes, co-location, benchmarks, and indices. The average number of professional market data subscriptions for TSX and TSX Venture, products grew by 6% in Q2 '21 compared with last year, and MX subscriptions were up 6%.The higher revenue was mostly offset by an unfavorable impact of approximately $2.8 million from a stronger Canadian dollar relative to the U.S. dollar over Q2 2020. Revenue from CDS was up 13% in Q2 '21, reflecting a higher issue of services, depository, settlement and international revenue as well as higher revenues for account transfer online notification. The revenue increases were partially offset by equities and fixed income trading revenue, which decreased 15% in Q2 '21 compared with Q2 '20.The decrease was driven by a 12% decline in the overall volumes of securities traded on our equities marketplaces. Trading volumes on TSX Securities decreased by 26% in the quarter, while volumes on TSX Venture Exchange and TSX Alpha Exchange increased by 18% and 5%, respectively. There was also a decrease in fixed income trading revenue, reflecting lower activity in swaps and Government of Canada bonds in Q2 '21. These decreases were partially offset by higher yields on all our equities marketplaces in Q2 '21 compared with Q2 '20.As I mentioned earlier, operating expenses in Q2 '21 decreased by 6% compared to Q2 last year. The lower expenses were mainly driven by the net litigation settlement costs of $12.4 million included in SG&A costs in Q2 2020. There was also a $1.8 million decrease in expenses in Q2 '21, largely relating to a release of a provision for restoration costs for our data center. These decreases in expenses were partially offset by higher headcount and payroll costs, higher software licensing and maintenance costs as well as higher consulting and director fees in Q2 '21 compared with Q2 of last year.Turning now to sequential results. Sequentially, revenue decreased $7 million or 3% from Q1 '21 to Q2 '22 -- '21, primarily attributable to lower revenue in equities and fixed income trading and derivatives trading and clearing, partially offset by higher revenue in capital formation. Operating expenses decreased $7.2 million or 6% from Q1 '21, reflecting lower short-term employee performance plan and sales commission costs of $3.3 million, lower payroll costs of $3.1 million and lower long-term performance incentive plan costs of $1.6 million. In addition, there was a $1.8 million decrease in operating expenses, largely relating to the release of a provision for restoration costs for our data center in Q2 2021, which I mentioned earlier. These decreases were partially offset by higher director fees, increased software license and maintenance costs and higher bad debt expense from Q1 '21 to Q2 '21.Turning now to our balance sheet. In Q2 '21, we spent $18.6 million, repurchasing 140,000 of our common shares under our normal course issuer program. Our debt and adjusted EBITDA ratio was 1.8x at the end of the quarter. We also held just over $419 million in cash and marketable securities at the end of the quarter, which was about $250 million in excess of $165 million, we target to retain for regulatory and credit facility purposes. Yesterday, our Board approved a quarterly dividend of $0.77 per common share payable to payable on September 3 to shareholders of record as of August 20. At 41% of our adjusted EPS, this is consistent with our target payout ratio of 40% to 50%. And now I'd like to turn the call back to Paul.
Thanks, David. Operator, could you please outline the process for the question-and-answer session.
Thank you. [Operator Instructions] Our first question comes from Nik Priebe with CIBC Capital Markets.
The earnings contribution from equity accounted investees has been a tailwind for the past few quarters. It looks like that relates to BOX. It might be helpful if you could give some insight on your outlook for how that line item might travel over the next 12 months or so. I'm just trying to get a sense of whether that contribution might be sustainable.
It's David Arnold here. So you are correct. That is our investment in BOX. For those not familiar with the Boston Options Exchange, I think the performance over there is really market-driven. And one needs to pay close attention to the options trading statistics in the U.S., and that's publicly available information. So we do look closely at that Nick, to try and project and model out where the earnings might land. So that's the first place that I would guide you towards. The second thing that I would mention, though, is that the -- in Q4 last year, you'll recall we had a lumpy adjustment for a incentive compensation true-ups at BOX. And so that was a bit of a surprise to us, so we accounted for that. So we're working with them to make sure that those kinds of surprises don't come in future quarters. I would expect a minor adjustment for that in Q3, and then hopefully, things just stabilize, purely driven by market characteristics.
Okay. That's helpful. And then my second question is just on revenue per contract at MX. It was lower in Q2. And I think you cited product mix for the in-quarter impact. But I'm looking at that ratio over a longer period of time, and it looks like it's been declining for a year or more than over a year, maybe 2 years. Is there anything else impacting revenue capture at MX? Or has that strictly been a product of mix changes over time?
It's been a product mix over time, and it continues. I mean, as we launch products and create liquidity and enable us to market those products. There are various incentives, which do obviously impact the revenue per contract, as you know, Nick. I don't know, John, if you want to add any additional color?
Yes. I mean, the 2 pieces, I'll add, Nick, if you think about performance even just over the years so far and as it compares, where we've seen the largest growth is on things like single stock futures year-over-year, equity options year-over-year, those are lower revenue per contract products. But as David said, as we've been launching new futures products like the 5-year, when we do the 30 years, the 2-year we did last year, we do bring the market with a richer incentive program to bring liquidity onto them. And so as those products grow, it does have that impact on that mix on RPC. But over the long term, those products, those promotions, they will run off and those prices will normalize as those products get stabilized, they have ongoing liquidity, and they can be -- then run like we run the CGB, the 10-year bond program today. So in some cases, it's mix, and in some cases, it's around the incentives that are temporary to help the products get going.
Your next question comes from Etienne Ricard with BMO Capital Markets.
To start on derivatives. Volumes are trending -- have been trending favorably in the first half, and it's great to see TMX planning to relaunch the 30-year and as well as the upcoming cession to Asia. So based on your experience launching new products in the recent years, what sort of volume benefit are you expecting from these initiatives?
Yes. When you think about the launch of the 30 year, what we'd guide towards is, look at the performance we've seen in the 5-year product, which we launched about 2 years ago in terms of how that built liquidity. Look at also the performance of the two-year product, which we quickly built into over 10,000 contracts a day. So those are good guideposts to see kind of what we expect for the 30 year. There is going to be some waiting to see how the products interact with each other in the marketplace. Because remember, the theory around these is about building up that full yield curve, so that people can trade at all different points of the Canadian yield curve, but also will -- that will also enable trading strategies across where people may go short on one period and long and others. So how the products interact, that will still be what we will look to tell. But I would use those earlier products as the guidepost.With respect to Asia, if you look at our success on the European time zone, kind of 5% to 6% of our trade flow going through that time zone trade. The Asian market has the potential to be even more impactful because we are bringing in net new traders that aren't there already, where Europeans, we had some of those that were all really familiar with our marketplace. So when you benchmark other international organizations have done this already they see in terms of full global trading anywhere from 15% to 30% of their flow coming from those off-market trading hours. And we're, as I said, at 6% today with just Europe. So that should give you an indication of where we're targeting for the upside.
Okay. Great. And from a macro backdrop, with bond yields coming down in recent weeks, how do you expect interest rate derivative volumes to trend over the foreseeable future?
That's always such a tough question. There's a lot of magic 8 ball in that question. Where we do see things is -- and this is the importance of yield curve again, is yields can be different at different points. And so having that product breadth, you can have products that are going to be active to different market conditions. So we do see potential across the curve. The other piece I always want to keep reminding folks of is that coming out of COVID, both the good and the bad is that we are going to be seeing more long bond issuance over the long term. Government is raising a lot of debt to pay for the programs, means we are going to see a substantial increase in the underlying cash market, and that supports growth in the derivatives market as well. So that's something to keep in mind in terms of the long-term growth potential.
And from an industry perspective, there's been increasing talk around payment for order flow in the United States. So on this topic, could you remind us of competitive dynamics on the trading of interlisted securities? And what percentage of TMX volumes today represent?
Yes. And Paul, I'm going to look to Paul to help me in terms of where we are in terms of kind of cross-border market share. It hasn't been materially different over the last number of years. Paul, do you want to comment on that quickly? And then I'll...
Yes. It's been around the 30% range sort of for several years our share interlisted.
Yes. So the piece I'll add is Canada has not had a payment for order flow regime. I think we've got a -- you've got better market integrity and a better market structure that way. So anything in the U.S. that would tighten the rules around payment for order flow, can only be a net benefit to us because in a lot of cases, we actually have better execution quality on those interlisted in Canada, but the flow doesn't come northbound because of that payment of our flow regime. So I'm not saying that it is definitely a plus for us, but it's not a downside if the U.S. reforms that regime.
Your next question comes from Brian Bedell, Deutsche Bank.
Great. Maybe, John, if I can ask you about your view of both retail and capital formation coming into the second half. We are seeing a slowdown in retail trading activity typical for summer months. I know you thought that it was going to be a little bit more durable in Canada than the U.S. and of course, it is definitely episodic even in the U.S. But if you can talk about your -- how you see that forming in retail in the second half in Canada? And also, the capital formation, of course, has continued to be really strong momentum. So maybe if you can differentiate what you're seeing for innovative companies looking to raise capital and list and convert from the venture to the senior exchange. The outlook for that continuing in the second half?
Yes. It's a great question. So starting with the early part of your question around the retail participation, equity trading. I mean the highlight from where you started is exactly right, certainly in the second quarter, we have seen some pullback from the peaks that we had in the first quarter. But the flip side of that is the actual retail participation, the overall volumes, we're still actually trending at a level that's substantially above where we were pre-pandemic. So that condition for retail participation remains strong. I think if you look at quarter 2 versus quarter 2 of '19, if we went back 2 years ago, pre-pandemic, we're up about 37% across the markets. And on the markets that we have that are more retail-oriented like TSX Venture and Alpha, they're up 60% to 80%. So that engagement is still really strong. And part of that is the engagement with the strong valuations. There's good liquidity.And that ties into the second piece of your question around the continued conditions for strong equity capital raising. That's why we continue to see such strong raising so many companies coming to market. You've got the gist of it from my comments at the beginning, we've done about $35 billion in the first half of this year, of which $15 billion of that was tech, tech and innovation companies. So that's a huge piece of the mix. But interesting enough, it's still broad-based.So you've got mining and industrials financials as well that are making it up. In terms of outlook, and part of our outlook goes to what the file load is for the folks that are working on this every day, and they are still running all out. It actually is a testament to the people in our capital formation group, in terms of how hard they're working and doing it all remotely. So they are still seeing a deep pipeline of new issues come to market. It hasn't slowed down through the summer at all. We anticipated that it might just because the folks that work the industry may be tired, but it hasn't slowed down at all and that pipeline remains really strong. Obviously, Brian, I can't predict to you how long it will last only that the pipeline remains very full.
Yes. No, that's good color. It's impressive. And maybe just quickly on the ESG services that you've been offering to your listed issuers as they look to improve their disclosure and accounting for ESG. Can you just talk about how that's going? Are you seeing a very large surge in demand for that? And is that something that -- I know it's really part of the listing overall value proposition, but is that something that you think you can begin charging for at some point?
Well, with respect to what we're doing for the issuance, I'd say at this stage, and it is still early stage, what we're seeing is strong interest. And the work now in terms of the marketing efforts between ourselves and IHS Markit, who is our partner in delivering the ESG reporting portal, is now going to convert that into usage. So I think it's still we're -- I think we just launched this in May. So it's still early days in terms of that rollout in the marketing of the product. I do see that one, Brian, as being part of the core service we provide to issuers.They pay a premium to be on our markets. This is part of the way that we help make that relationship more sticky, provide more value and also make it easier for more companies to go public. So that ESG reporting isn't an additional challenge or burden for them. So I do see it in that piece, it's more about more companies to go public, a larger issuer base in the market versus pricing for that service. The long-term question will be, as you build more companies into it and we capture more data, is there a valuable market data opportunity that comes out of it? And that's yet to be seen, but that's where we would see more of the commercialization opportunity.
We have a following question from Rasib Bhanji, TD Bank.
My first question was on the increase in CDS revenue increase of 13% year-over-year. Curious as to what drove the increase when overall equity trading volumes were down 12% and versus last year?
Yes. So there's a combination in CDS. So it's not just the equity trading piece. If you remember, there's also the fixed income trading, the trade for trade activity. So overall, transaction or trades is what drives the trading -- the clearing revenue within CDS, and that actually continues to be up year-over-year.
Okay. That makes sense.
And Rasib, it's David. I mean, one of the other ones is our account transfer online notification did generate more revenue in this quarter. Referred to internally as the ATON.
Got it. And my second question was just on BOX. I understand in the past, you had flagged that investment as a non-core investment. I'm just wondering if there than -- like given the strong revenue uptick over there. Is that still the case? Or any update on your direction with that investment?
Yes. It's a great question. And I would never say that it's non-core. We're not an active manager of the business. We operate in there from a governance standpoint and a leadership standpoint. But we're not the control party in it. But it is a good investment. And what you've seen is, as David said, BOX being able to take advantage of that strong uptake in U.S. options activity. They've also benefited from increasing market share. So -- and beyond just the market improving, they've moved from, I think, 3 in change in market share to almost 5. So the team there is performing really well. We like what they're doing, and we'll continue to explore in the near-term of what more we can do with them. So that's the way I would think about it. It's -- I wouldn't say that it's non-core. It's something that has been more of a passive investment for us, but we are looking at the performance of it and seeing what more we can do with them.
Understood. And then just my last question was on the refined oil project on Trayport. I think you mentioned that last quarter, you had signed on one broker-dealer and this quarter, you mentioned there are 11 brokers using the product. So is it correct to say that you've signed on 10 more brokers during this quarter? And if you can also provide any more color on the new brokers you've signed on this quarter in terms of are the global clients? Are they specific to one geography? Or any sort of color would be appreciated.
Yes. I actually think we're talking apples and oranges between the -- this period and last. It's one large brokerage house, and we were talking to in terms of actually the number of actual broker subscribers that are using it because -- so we are still early days, we're still primarily one large partner on it. They are global in nature. So we are looking at refined oil for multiple geographies with them, and we all will be looking to bring on more broker partners on to it as we go as well as additional trader partners. But that's still early days in terms of building that liquidity on screen.
Thank you. There are no further questions at this time. Mr. Malcolmson, you may proceed.
Well, thank you, everyone, very much for listening today. If you have any further questions, the contact information for media as well as for Investor Relations is in our press release, and we'd be happy to get back to you. Everyone, please stay safe, and have a great day.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.