TMX Group Limited - MANAGEMENT'S DISCUSSION AND ANALYSIS

TMX Group Limited - MANAGEMENT'S DISCUSSION AND ANALYSIS

Page 1 TMX Group Limited MANAGEMENT'S DISCUSSION AND ANALYSIS August 8, 2018 This management’s discussion and analysis (MD&A) of TMX Group Limited’s (TMX Group) financial condition and financial performance is provided to enable a reader to assess our financial condition, material changes in our financial condition and our financial performance, including our liquidity and capital resources, for the quarter (Q2/18) and six months ended June 30, 2018 (1H/18), compared with the quarter (Q2/17) and six months ended June 30, 2017 (1H/17) and as at June 30,2018andDecember31,2017. ThisMD&Ashouldbereadtogetherwithourunauditedcondensedconsolidatedinterim financial statements as at June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017 (the “interim financial statements”), and the 2017 Annual MD&A.

Our interim financial statements and this MD&A for the three and six months ended June 30, 2018 are filed with Canadian securities regulators and can be accessed at www.tmx.com and www.sedar.com. The financial measures included in this MD&A are based on financial statements prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), unless otherwise specified. All amounts are in Canadian dollars unless otherwise indicated.

Certain comparative figures have been reclassified in order to conform with the financial presentation adopted in the current year. Additional information about TMX Group, including the Annual Information Form, is available at www.tmx.com and www.sedar.com. We are not incorporating information contained on our website in this MD&A. INITIATIVES AND ACCOMPLISHMENTS1 Capital Markets Capital Formation In May 2018, we announced that the exchange traded funds (ETFs) sector on Toronto Stock Exchange (TSX) had reached a record high of approximately $150 billion in assets under management (AUM), as of April 30, 2018.

Total AUM2 of ETFs listed on TSX has more than doubled in the past five years. In the first six months of 2018, TSX listed 55 new ETFs and welcomed three new institutions to its group of ETF providers.

Equities and Fixed Income Trading and Clearing In May 2018, Payments Canada, the Bank of Canada, TMX Group and Accenture demonstrated that the instantaneous clearing and settlement of securities on-ledger is feasible, showing for the first time that both central bank cash and assets can be tokenized to complete an instant, end-to-end equity settlement on distributed ledger technology (DLT). 1 The "Initiatives and Accomplishments" section above contains certain forward-looking statements. Please refer to "Caution Regarding Forward-Looking Information" for a discussion of risks and uncertainties related to such statements.

2 Quoted market value is used as a proxy for AUM

Page 2 Global Solutions, Insights and Analytics On April 12, 2018, we completed the sale of our entire 24.2% interest in FTSE TMX Global Debt Capital Markets Limited ("TMX FTSE") to FTSE International Limited, a wholly owned subsidiary of London Stock Exchange Group. TMX Group’s decision to enter into this transaction was made within the scope of the company’s strategy to focus resources on growing core data and analytics businesses. The proceeds of $70.4 million resulted in a gain on sale of approximately $26.8 million before and after income tax ($24.1 million gain on sale and $2.7 million realized gain on foreign currency translation), which is reflected in our net income for Q2/18.

InJune2018,wewereadvisedbytheCanadianSecuritiesAdministrators(CSA)thatwecou ldcontinuetoactasinformation processor (IP) to consolidate equities data other than options in Canada under National Instrument 21-101 Marketplace Operation until June 30, 2022. Trayport3 We completed the acquisition of London-headquartered Trayport Holdings Limited (Trayport) in December 2017. We will focus on capitalizing on four macro themes in the global energy markets that present growth opportunities in both new markets and in new services to existing clients: 1. We plan to take advantage of the increasing demand for data and analytics to drive quantitative decision-making and to assist clients in meeting their regulatory requirements.

We will provide a new rich analytic interface and new applications giving clients the ability to mine critical data sets.

2. We will capitalize on the globalization of the world’s gas markets, by providing enhanced execution, data and analytics to existing clients as well as new clients globally who need to access these developing gas markets. As a result, Trayport clients will have one of the most complete views and trading access to the rapidly growing global gas market. 3. We will leverage new technologies to drive automation and efficiency as business processes become digitized. Today, a significant amount of brokers’ trading volumes are executed via voice or instant message. Trayport will be the leading provider of hybrid tools to support brokers as their businesses become more digital, which will in turn help traders with a more timely and complete view across markets.

This initiative will also enable Trayport to deliver increased value along the full trade lifecycle by increasing the data and analytics tools available for OTC markets and facilitating broker expansion into new asset classes and geographies.

4. The rise of renewable energy sources is having an increasing impact on energy generation and trading. Trayport will help clients meet the increasing demand in spot power and gas markets with new trading tools. In Q2/18 we revised our estimate of transaction costs related to the Trayport acquisition from $0.3 million to $0.7 million from the previous estimate of $1.4 million to $4.4 million. In 1H/18, we incurred $0.2 million of transaction costs related to Trayport. 3 The "Trayport" section above contains certain forward-looking statements. Please refer to "Caution Regarding Forward-Looking Information" for a discussion of risks and uncertainties related to such statements.

Page 3 Derivatives Markets Derivatives Trading and Clearing Montreal Exchange (MX) achieved a new record quarterly total volume with 27,464,391 contracts traded in Q2/18. In June2018,MXachievedanewopeninterestrecordontheS&P/TSX604 IndexStandardFutures(SXF)with456,723contracts reached. In 2016, we launched single stock futures (SSFs) on about 20 symbols. The balance of the S&P/TSX 604 symbols were added throughout Q1/17. In June 2018, we launched SSFs on 12 Exchange Traded Funds (ETFs). In April 2018, Canadian Derivatives Clearing Corporation (CDCC), Canada's national central clearing counterparty (CCP) for exchange-traded derivative products, certain over-the-counter (OTC) products and repurchase agreements (repos), announced the launch of its new direct-clearing model for Canadian buy-side firms.

MX is expected to implement extended trading hours from the current 6:00am ET open to a 2:00am ET open on October 9,2018.ThisinitiativeisinlinewithMX’smissiontobeaclientfocusedandgloballyre cognizedleadingderivativesexchange, as it will allow domestic and international clients to manage their exposure to Canadian markets during non-regular Canadian business hours.

Update on Integrated Clearing Platform5 Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions organization, is implementing a single, integrated technology platform for our clearing and settlement businesses. The innovative platform, called TCS BaNCS for Market Infrastructure, will replace the legacy systems deployed by CDS and CDCC, subject to regulatory approval where required. Our current estimate of the expected cash outlays is approximately $55.0 - $60.0 million from 2017 to 2019, of which approximately $9.0 million was spent on capital expenditures in 2017.

Substantially all of the costs will be related to capital expenditures and we expect that almost half of the total spend will occur in 2018. In 1H/18 we spent $9.3 million, including $6.8 million on capital expenditures. The annual savings in operating expenses on a run rate basis, compared with our current cost structure, are expected to be approximately $6.0 to $8.0 million, starting in 2020. As we transition to the new platform, it is likely that operating expenses will increase over the short-term before we realize savings in 2020.

Corporate InMay2018,weimplementedorganizationalandexecutivechanges,includingnewstrate gicandexpandedresponsibilities for members of our senior management team: • Jean Desgagné, President and CEO, TMX Global Solutions, Insights and Analytics left the company to pursue new career opportunities. • Jay Rajarathinam, Chief Technology and Operations Officer expanded his mandate to take on the Product Development and Commercial Planning for Advanced Analytics, as well as TMX Innovation initiatives. 4 The “S&P/TSX 60” is a product of S&P Dow Jones Indices LLC (“SPDJI”) and TSX Inc. (“TSX”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services.

LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and TSX® is a registered trademark of TSX. SPDJI, Dow Jones, S&P and TSX do not sponsor, endorse, sell or promote any products based on the S&P/TSX 60 and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the S&P/TSX 60 or any data related thereto. 5 The "Update on Integrated Clearing Platform" section above contains certain forward-looking statements. Please refer to "Caution Regarding Forward-Looking Information" for a discussion of risks and uncertainties related to such statements.

Page 4 • Shaun McIver, Chief Client Officer took on the additional responsibility for Advanced Analytics sales, and assumed responsibility for the Datalinx business. MARKET CONDITIONS Overall, Canadian equities trading volumes were up 15% in 1H/18 compared with 1H/176 . The average CBOE Volatility Index (VIX) was 15.3 in 1H/18 up significantly from 11.4 in 1H/17. Trading on TSXV (including NEX) increased with a 12% increase in volumes traded in 1H/18 compared with 1H/17; however, there was a decline of 6% in the volume traded on TSX over the same period. Derivative trading in Canada was positively impacted by speculation around an increase in interest rates as reflected in an 8% increase in the volume of contracts traded on MX in 1H/18 compared with 1H/17.

The more volatile market environment contributed to less favourable conditions for capital raising in 1H/18. On TSX, the total amount of financing dollars raised declined by 30% and the total number of financings decreased by 7% in 1H/18 compared with 1H/17. Looking specifically at IPOs on TSX, there was a 4% decrease in the number of IPOs and a 51% decrease in IPO financing dollars raised in 1H/18 compared with last year. The more volatile environment had less of an impact on TSXV (including NEX) where there was a 17% increase in the total amount of financing dollars raised despite a 2% decrease in the total number of financings in 1H/18 over the same period last year.

On July 11, 2018, The Bank of Canada increased its overnight rate target to 1.5%.7 The Bank said it expects the global economy to grow by about 3¾ per cent in 2018 and 3.5% in 2019, in line with the April Monetary Policy Report. The U.S. economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the U.S. dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based U.S. dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.

The Bank also said Canada’s economy continues to operate close to its capacity and the composition of growth is shifting. 6 Source: IIROC (excluding intentional crosses). 7 Source: Bank of Canada press release, July 11, 2018. RESULTS OF OPERATIONS Non-IFRS Financial Measures Adjusted earnings per share, adjusted diluted earnings per share, adjusted earnings per share before discontinued operations, and adjusted diluted earnings per share before discontinued operations are non-IFRS measures and do not have standardized meanings prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other companies.

Wepresent adjusted earningsper share, adjusteddilutedearningspershare,adjustedearningspersharebeforediscontinued operations, and adjusted diluted earnings per sharebeforediscontinued operations to indicate ongoing financial performance from period to period, exclusive of a number of adjustments. These adjustments include amortization of intangibles related to acquisitions, non-cash impairment charges, increase in deferred income tax assets, write-off of deferred income tax assets, netincometaxrecoveryongainonsaleofNaturalGasExchangeInc.(NGX),gainonsaleofi nterestinTMXFTSE,andcommodity tax provision.

Management uses these measures, and excludes certain items, because it believes doing so results in a more effective analysis of underlying operating and financial performance, including, in some cases, our ability to generate cash. Excluding these items also enables comparability across periods. The exclusion of certain items does not imply that they are non-recurring or not useful to investors.

Page 5 Additional IFRS Measures Income from operations before strategic re-alignment expenses and income from operations are important indicators of TMX Group's ability to generate liquidity through operating cash flow to fund future working capital needs, service outstanding debts and fund future capital expenditures. The intent of these performance measures is to provide additional useful information to investors and analysts; however, these measures should not be considered in isolation. Sale of NGX and Shorcan Energy - discontinued operations On December 14, 2017, we completed the sale of NGX and Shorcan Energy Brokers Inc (Shorcan Energy).

TMX Group has classified the sale of NGX and Shorcan Energy as discontinued operations. Prior to the sale, the operations of NGX and Shorcan Energy entirely comprised of the Energy Trading and Clearing operating segment and a small portion of the Global Solutions, Insights and Analytics operating segment.

The classification of discontinued operations occurred at December 14, 2017 which is the date of disposal of the operations. Accordingly, TMX Group has re-presented the comparative consolidated income statements to show the discontinued operations separately from continuing operations.

Page 6 Three Months Ended June 30, 2018 Compared with Three Months Ended June 30, 2017 The information below reflects the financial statements of TMX Group for the quarter ended June 30, 2018 compared with the quarter ended June 30, 2017. (in millions of dollars, except per share amounts) Q2/18 Q2/17 $ increase % increase Revenue $209.5 $174.9 $34.6 20% Operating expenses 119.7 89.5 30.2 34% Income from operations8 89.8 85.4 4.4 5% Net income 95.6 66.5 29.1 44% Earnings per share before discontinued operations9 Basic 1.72 1.11 0.61 55% Diluted 1.71 1.10 0.61 55% Earnings per share10 Basic 1.72 1.20 0.52 43% Diluted 1.71 1.19 0.52 44% Adjusted Earnings per share before discontinued operations11 Basic 1.34 1.18 0.16 14% Diluted 1.34 1.16 0.18 16% Adjusted Earnings per share12 Basic 1.34 1.28 0.06 5% Diluted 1.34 1.26 0.08 6% Cash flows from operating activities 119.7 86.8 32.9 38% Net income Net income in Q2/18 was $95.6 million, or $1.72 per common share on a basic and $1.71 on a diluted basis, compared with a net income of $66.5 million, or $1.20 per common share on a basic and $1.19 on a diluted basis, for Q2/17.

The increase in net income in Q2/18 largely reflected a gain on the sale of our interest in TMX FTSE of $26.8 million before and after income tax (48 cents per basic and diluted share). In addition, there was higher revenue from Global Solutions, Insights and Analytics (GSIA), which included $27.9 million related to Trayport (acquired December 14, 2017). The increase in revenue was partially offset by higher operating expenses, which included $19.2 million related to Trayport, a commodity tax provision of $7.6 million (10 cents per basic and diluted share) and a lease termination payment of $4.5 million (6 cents per basic and diluted share).

There was a decrease in income tax expense, which reduced our effective tax rate for Q2/18, relating to realizing and utilizing a capital loss, increasing net income. In Q2/18, we realized a capital loss on the wind up of a limited partnership, resulting in a tax benefit of approximately $11.8 million. This capital loss was applied to eliminate income tax otherwise payable of $3.8 8 See discussion under the heading Additional IFRS Financial Measures. 9 Earnings per share before discontinued operations is based on income before income from discontinued operations, net of tax. 10 Earnings per share information is based on net income.

11 See discussion under the heading Non-IFRS Financial Measures. 12 See discussion under the heading Non-IFRS Financial Measures.

Page 7 million on the sale of our interest in TMX FTSE in Q2/18 and reduce the income tax of $8.0 million on our sale of NGX in 2017. Also,thenon-taxableportionofthecapitalgainonthesaleofourinterestinTMXFTSEre sultedinataxbenefitofapproximately $3.3 million. Theoverallincreaseindilutedearningspersharewaspartiallyoffsetbytheimpactfro manincreaseinthenumberofweighted- average common shares outstanding in Q2/18 compared with Q2/17 and higher net finance costs. In addition, the basic and diluted earnings per share in Q2/17 includes net income related to NGX and Shorcan Energy (sold December 14, 2017).

Adjusted Earnings per Share and Adjusted Earnings per Share before discontinued operations13 Reconciliation for Q2/18 and Q2/17 The following is a reconciliation of earnings per share before discontinued operations14 to adjusted earnings per share15 : Q2/18 Q2/17 (unaudited) Basic Diluted Basic Diluted Earnings per share before discontinued operations16 $1.72 $1.71 $1.11 $1.10 Adjustments related to: Amortization of intangibles related to acquisitions 0.17 0.17 0.11 0.10 Increase in deferred income tax assets resulting from capital loss carryback17 ( 0.04) (0.04) Net income tax recovery on gain on sale of NGX (0.17) (0.16) — — Gain on sale of interest in TMX FTSE (0.48) (0.48) — — Commodity tax provision 0.10 0.10 — — Adjusted earnings per share before discontinued operations18 $1.34 $1.34 $1.18 $1.16 Earnings per share from discontinued operations — — 0.09 0.09 Adjustment related to amortization of intangibles related to acquisitions — — 0.01 0.01 Adjusted earnings per share19 $1.34 $1.34 $1.28 $1.26 Weighted average number of common shares outstanding 55,578,475 56,045,700 55,305,850 55,785,847 Adjusted diluted earnings per share before discontinued operations increased by 16% from $1.16 in Q2/17 to $1.34 in Q2/18.

The increase in adjusted diluted earnings per share before discontinued operations reflected higher revenue from Global Solutions, Insights and Analytics (GSIA), which included $27.9 million related to Trayport (acquired December 14, 2017). The increase in revenue was partially offset by higher operating expenses, which included $19.2 million related to Trayport and a lease termination payment of $4.5 million (6 cents per basic and diluted share). The increase in adjusted diluted earnings 13 See discussion under the heading Non-IFRS Financial Measures. 14 Earnings per share before discontinued operations is based on income before income from discontinued operations, net of tax.

15 See discussion under the heading Non-IFRS Financial Measures. 16 Earnings per share before discontinued operations is based on income before income from discontinued operations, net of tax. 17 Related to sale of Razor Risk. 18 See discussion under the heading Non-IFRS Financial Measures. 19 See discussion under the heading Non-IFRS Financial Measures.

Page 8 per share before discontinued operations was partially offset by the impact from an increase in the number of weighted- average common shares outstanding in Q2/18 compared with Q2/17 and higher net finance costs. Revenue (in millions of dollars) Q2/18 Q2/17 $ increase % increase Capital Formation $57.8 $51.6 $6.2 12% Equities and Fixed Income Trading and Clearing 46.8 46.7 0.1 0% Derivatives Trading and Clearing 33.3 31.4 1.9 6% Global Solutions, Insights and Analytics 70.7 46.3 24.4 53% Other 0.9 (1.1) 2.0 182% $209.5 $174.9 $34.6 20% Revenue was $209.5 million in Q2/18, up $34.6 million or 20% compared with $174.9 million in Q2/17 largely attributable toanincreaseinGlobalSolutions,InsightsandAnalytics revenuereflectingtheinclusionofrevenuefromTrayport(acquired December 14, 2017) of $27.9 million, partially offset by a decline of $2.1 million in revenue from TMX Atrium (sold on April 30, 2017).

There were also increases in Capital Formation, Fixed Income trading, CDS, and Derivatives Trading and Clearing revenue. Other revenue increased largely due to the impact from recognizing net foreign exchange gains mainly on U.S. dollar net monetary liabilities in Q2/18 compared with net foreign exchange losses in Q2/17. Equities Trading revenue declined from Q2/17 to Q2/18.

Capital Formation (in millions of dollars) Q2/18 Q2/17 $ increase/ (decrease) % increase/ (decrease) Initial listing fees $3.3 $3.7 $(0.4) (11)% Additional listing fees 27.2 23.5 3.7 16% Sustaining listing fees 17.7 17.6 0.1 1% Other issuer services 9.6 6.8 2.8 41% $57.8 $51.6 $6.2 12% • Initial listing fees in Q2/18 decreased from Q2/17 reflecting a decrease in initial listing fees on TSX due to a decrease in the number of new issuers listed and initial public offering financing dollars raised. Effective January 1, 2018, we changed our method for recognizing initial listing fee revenue in accordance with IFRS 15, Revenue from Contracts with Customers (see Changes in accounting policies).

In Q2/18, we recognized $1.3 million of total initial listing fees received of $3.6 million with the balance of $2.3 million to be recognized over the remaining 12 months. Since the cumulativeimpactofthischangewasrecordedeffectiveJanuary1,2018,wealsorecogni zedinitiallistingfeesreceived in 2017 and Q1/18 of $2.0 million and $0.6 million respectively during Q2/18. Under IFRS 15, total initial listing fees of $3.3 million was approximately $0.2 million lower than the revenue that would have been the case if initial listing fees were recognized when the listing occurred. The decrease in initial listing fee revenue was somewhat offset by an increase in initial listing fees on TSXV reflecting an increase in new issuers listed.