TMX Group, Canada's incumbent stock market and derivatives operator, confirmed it's in talks to merge with London Stock Exchange to create a mecca for resource stocks and financings and expand operations in the fast-growing derivatives arena.

Toronto-based TMX and the London Stock Exchange, whose major shareholders are Qatar Investment Authority and Borse Dubai, said they are in talks to merge through an exchange of shares based on a ratio of their respective market capitalisations, suggesting investors for neither company would receive a significant premium if the deal proceeds.