Exhibit B. May 2, 2017

Transcription

1 Exhibit B May 2, 2017

2 TABLE OF CONTENTS INTRODUCTION 3 SECTION I - MARKET DATA ADMINISTRATION 4 A. TMX DATALINX MARKET DATA AND CLIENTS 4 1. Market Data 4 2. Market Data Clients 4 B. CLIENT AUTHORIZATION 5 1. Distributor Authorization 5 2. Procedures for Distributor Authorization 5 3. Subscriber Authorization 6 4. Procedures For Subscriber Authorization 6 C. REPORTING 7 1. Overview 7 2. Reporting Content 8 3. Timeliness of Reports 9 D. PAYMENT AND INVOICING 9 1. Payment 9 2. Invoicing 10 E. CONTACT INFORMATION 10 SECTION II - MARKET DATA DISTRIBUTION POLICIES 11 A. ADMINISTRATIVE DATA USAGE 11 B. DATAFEED CLASSIFICATION 11 C. DELAYED DATA 11 D. DERIVED DATA AND NON-DISPLAY APPLICATIONS 11 E. MONTREAL ORDER ROUTING 12 F. DISASTER RECOVERY SITES 12 G. ENTITLEMENT SYSTEMS 12 H. PER QUOTE METERING AND CAPPING 13 I. SERVICE FACILITATORS 13 J. SOFTWARE DEVELOPER 13 K. UNIT OF COUNT 13 L. TSX/CP EQUITIES NEWS 14 M. USE OF CONSOLIDATED DATA PRODUCTS 14 N. USE OF S&P/TSX INDICES DATA 15 SECTION III AUDIT POLICIES AND PROCEDURES 16 A. OVERVIEW 16 B. GLOSSARY OF TERMS 16 C. PRINCIPLES OF BEST PRACTISE Overall Audit Approach Confidentiality 17

3 3. Audit Purpose Audit Frequency Audit Period Audit Policy Publication Audit Consolidation Audit Training and Preparedness Third-Party Audits Audit of Vendor s Redistribution 18 D. PREPARATION Prior Notice Audit Planning 19 E. ON SITE Cooperation Audit Queries Audit Findings Exit Meeting 20 F. AUDIT RESULTS AND REPORTS Audit Follow-up Process Audit Report Audit Settlement Closure 22 APPENDIX A: SAMPLE-Announcement or Letter of Engagement 23 Page 2

4 INTRODUCTION TMX Datalinx, a division of TSX Inc., disseminates real-time, historical, and index data across a number of asset classes as well as corporate information, news and foreign exchange data. Terms not otherwise defined herein shall have the meanings ascribed to them in the following agreements. o o o o o TMX Group Market Data Distribution Agreement Agreement for Distribution of TBF Data Agreement for Distribution of CBF Data Agreement for Distribution of SBF Data Agreement for Distribution of ABF Data Page 3

5 SECTION I - MARKET DATA ADMINISTRATION This section outlines the policies and procedures to be followed by Distributors of Market Data relating to: client authorization; reporting of data inventory; invoicing and payment details for data charges; and contact information. A. TMX DATALINX MARKET DATA AND CLIENTS 1. Market Data Market Data means any information provided through the facilities of TMX directly or indirectly, relating to: (i) securities or other financial instruments, markets, products or indices; (ii) Third Party Contributor Data; (iii) any other information, news, data services or content including without limitation, order data provided from TMX and/or Third Party Contributors; or (iv) any specifications, instructions or materials in connection with the foregoing. Market Data includes but is not limited to the creation of original works which are based in whole or in part from the Market Data which (a) can be reverse-engineered to recreate the Market Data, and/or (b) is a reasonable facsimile of the Market Data. Market Data may be accessed as data feed broadcasts or as end-user products. Data feeds are broadcast transmissions directly or indirectly from TMX facilities, while end-user products are accessed through Distributors' services. Market Data may be real-time, delayed, or end of day. Real-time data shall mean Market Data from the time of dissemination by TMX to the time fifteen (15) minutes after such dissemination. Delayed data shall mean Market Data that is delayed by a minimum of fifteen (15) minutes from the time of dissemination by TMX. End of Day data shall mean Market Data that is provided after the market close plus the appropriate delay period, and reflects the activity of the trading day that has just passed. 2. Market Data Clients TMX classifies Market Data clients according to their intended use of Market Data. Distributor a data feed recipient who receives feeds for the purpose of re-distributing the data. They may either be an External or Internal Distributor. External Distributors distribute Market Data to users outside their organizations through various mediums such as the Internet, interrogation devices, pagers or wallboards. An External Distributor who connects directly to the TMX may re-distribute data on a feed level to another External Distributor (including Cobranding), and an Internal Distributor. Internal Distributors distribute Market Data to users within their organizations, regardless of number of locations. Internal Distributors may only distribute Market Data to professional subscribers. Subscriber - access Market Data through an External Distributor s service. Subscribers are classified as Professionals or Non-Professionals. Page 4

6 Professional Subscribers are individuals or organizations that use Market Data for business purposes. Professional Subscribers pay the monthly subscription fee, regardless of whether they access data on a continuous update basis, or on a per-quote or metered basis. Non-Professional Subscribers are individuals who employ Market Data for personal use. Non-Professionals may access data on a continuous update basis, or on a per-quote or metered basis, and pay applicable fees. B. CLIENT AUTHORIZATION 1. Distributor Authorization Policy Overview Distributors are required to complete the following prior to being authorized for data access. This policy applies for real-time/delayed data distribution for External and Internal Distributors. Two original executed Distribution Agreements The Distribution Agreement is a legal document outlining the rights and responsibilities of the Distributor relating to the use and distribution of Market Data. A completed and approved Exhibit A Exhibit A is a questionnaire which describes the Market Data to be received by Distributor and the permitted uses thereof, as well as Distributor s system for furnishing Receipt of Market Data including the methods of receipt, retrieval, processing and supply of Market Data by Distributor to any Person. 2. Procedures for Distributor Authorization The following section describes the procedures for obtaining TMX approval in authorizing access for real-time and delayed data feeds. Scenario A: Request for a New Distributor 1. Distributor must send to TMX via a completed Data Feed Request Form, with complete client details such as products requested, company and contact information. 2. TMX provides an information package to the client for completion via When the client returns the TMX Agreements and the Exhibit A, TMX reviews the application. TMX may contact the client if more information is required. 4. TMX sends an approval notice to the Distributor and client. TMX will also provide the client with the original executed Distribution Agreement and relevant data policies. 5. The Distributor provides access to Market Data. Scenario B: Request for an Existing TMX Distributor 1. Distributor must send to TMX a completed Data Feed Request Form with complete client details such as product requested, company, and contact information. The form should indicate that the client has an existing service location. Page 5

7 2. TMX reviews the client file to determine if information needs updating. 3. If no updates are required, application is approved immediately, and TMX sends an approval notice to the Distributor and the client. 4. TMX contacts the client if additional information/agreements are required and provides appropriate documents for completion. 5. The client re-submits the completed requirements. 6. Once application is approved, TMX sends an approval notice to the Distributor and the client. 7. The Distributor provides access to Market Data. Testing and Development Period In connection with certain Third Party Contributor Data and notwithstanding anything to the contrary in the Agreement, TMX may, in its sole discretion, authorize up to a 60 day testing and/or development period (the Testing Period ) during which time Distributor and/or Subscriber, as the case may be, agree to use the Market Data for internal testing and/or development purposes only. During the Testing Period, no fees will be charged to the Distributor and/or Subscriber, as applicable, and the Testing Period may be cancelled by TMX at any time in its sole discretion. Notwithstanding the foregoing, all other terms and conditions of the Agreement will continue to apply during the Testing Period. Distributor and/or Subscribers must notify TMX of cancellation of the Testing Period failing which, as of the expiry of the Testing Period, fees will be charged. 3. Subscriber Authorization Policy Overview Each Subscriber class (Professional, Non-Professional) is required to execute or acknowledge only one Agreement regardless of the number of real-time data products it receives. Distributors are not required to administer the Agreement for Subscribers receiving delayed data. For audit purposes, Distributors are required to maintain copies of all the executed or acknowledged Agreements for a minimum of two years. 4. Procedures For Subscriber Authorization Professional Subscribers Unless other contractual arrangements have been made, Distributors are required to obtain prior written approval before providing data service to Professional Subscribers. Distributors must submit to TMX a completed TMX Subscriber Product Request Form and an executed Professional Agreement for Receipt of Canadian Market Data on behalf of Professional Subscriber. Procedure 1. Distributors must provide the Professional Subscribers with the Professional Subscriber Agreement for Receipt of Canadian Market Data (with Schedule A if applicable) for signature. 2. Distributors must the entire signed Agreement and the completed Subscriber Product Request Form to TMX for approval. Distributors need not submit the original Agreement to TMX unless requested to do so but must Page 6

8 retain the document at its premises. 3. TMX reviews the Agreement. 4. TMX returns, via , the Subscriber Product Request Form to the Distributor indicating approval or if additional information is required. 5. Distributors may authorize the Subscriber for data access only upon receiving the written approval from TMX. Non-Professional Subscribers Distributors must ensure Subscribers have signed or acknowledged the Non-Professional Agreement prior to being authorized for data access. Distributors are not required to obtain prior written approval before authorizing access to Non-Professional Subscribers, however, Distributors are responsible for performing an acceptable level of due diligence on subscribers to ensure that they qualify for non-professional status. Distributors will be liable for fee differential between Non-professional and Professional royalties, if and when said Distributor s customers have been deemed to have incorrectly claimed Non-Professional status. Customer status will be verified during regular audits. Distributors may administer the Agreement using these options: 1. Subscribers may execute the Non-Professional Agreement for Receipt of Canadian Market Data. 2. Subscribers may acknowledge the Agreement (Click-on version). 3. Subscribers may execute or acknowledge the Distributor s own Agreement, provided it contains TMX Terms of Reference, and it has received prior approval from TMX counsel. C. REPORTING 1. Overview Distributors controlling the entitlement of Market Data are required to submit electronic inventory reports monthly. These reports are used as the basis for data charges. Reporting is facilitated through the services of TCB Data Systems. Upon authorization, TMX provides the Distributors with reporting details (i.e., IDs, passwords) to access TCB Data Systems services. External Distributors report Subscribers through the SOLAR system. SOLAR is a sophisticated web application that enables users to create and manage their customers' names, addresses, and inventory information. Internal Distributors report their end-user accesses through the Automated Data Feed Reporting System (ADFR), an electronic facility that allows Internal Distributors to report their entitled device quantities directly to TMX. Page 7

9 2. Reporting Content External Distributors reports must contain the following: Client type Report content Data Feed Recipients User ID Client Name Complete Address Address Changes Product Codes Changes in data feed inventory Effective date Professional Subscribers User ID Client Name Complete Billing Address Complete Service Address (if different from Billing Address) Product Codes Changes in data access inventory per User ID Comments for name changes Effective date Non-Professional Subscribers User ID Total Number of Non-Professional users inventory Product codes Effective date All client details (name, address, phone number) may be required upon TSX request Capped Subscribers Total Number of Non-Professional users inventory Product codes Effective date All client details (name, address, phone number) may be required upon TSX request Usage-Based Subscribers Effective date Product codes Previous number of hits per access type Current number of hits per access type Changes in number of hits Page 8

10 3. Timeliness of Reports Distributors are required to submit their inventory reports to TSX as scheduled below. Inventory reports must be submitted within the specified period; otherwise, TSX approval is required in order for inventory changes to be effective. Distributors must report Professional Subscribers cancellation within a 90-day period. Cancellations reported outside of the 90 days will be adjusted to adhere to this policy. Clients External Distributors Data Feed Recipients Professional Subscribers Non-professional Subscribers Capped Subscribers Usage-based Subscribers Report Due Date 10 th of each month 10 th of each month 10 th of each month 5 th of each month 5 th of each month Internal Distributors 10 th of each month D. PAYMENT AND INVOICING 1. Payment TSX invoices Distributors and Professional Subscribers for charges incurred. All clients must remit payments upon receipt of invoice. Clients within Canada are invoiced in Canadian dollars while clients outside Canada are invoiced in US dollars. Clients may opt to remit payments through wire transfer to TSX: The Royal Bank of Canada - Main Branch Toronto ON Canada US Funds Account # Swift Code or Routing Transit Number (RTN/ABA) is ROYCCAT2 Canadian Funds Account # Clients should quote their account and invoice numbers when sending transfers to TSX bank account. Check payments along with invoice copy must be sent to: Page 9

11 TSX Inc. The Exchange Tower 130 King St., West Toronto ON M5X 1J2 CANADA Attn: Accounting Department 2. Invoicing TSX invoices the client as follows: Clients External Distributors Fees Access fees for data feeds Royalty fees for Non-Professional Subscribers Royalty fees for Usage-Based Subscribers Royalty fees for Professional Subscribers (see note) Professional Subscribers Royalty fees for Professional Subscribers Note - External Distributors may pay royalty fees on behalf of their professional subscribers only if contractual arrangements have been made to do so. E. CONTACT INFORMATION Inquiry Type General Inquiries and Subscribers External Distributors (primary) Internal Distributors (primary) Escalation (first level) Escalation (second level) Escalation (third level) Contact TMX Datalinx Services Ph: Fx: marketdata@tmx.com Dave Hill Director, Global Client Management Ph: dave.hill@tmx.com Amin Mousavian Senior Manager, Global Client Management Ph: amin.mousavian@tmx.com Dave Hill Director, Global Client Management Ph: dave.hill@tmx.com Michelle Tran Vice-President, Global Sales and Service, TMX Datalinx Ph: michelle.tran@tmx.com Eric Sinclair President, TMX Datalinx Ph: eric.sinclair@tmx.com Page 10

12 SECTION II - MARKET DATA DISTRIBUTION POLICIES This section outlines specific policies regarding guidelines, requirements, and restrictions around the distribution of TMX Market Data. These policies are subject to change at any time. Policy changes throughout the course of the calendar year will be included in Exhibit B. As a member of FISD, TMX has made commercially reasonable efforts to adhere to the spirit of FISD Best Practice Recommendations. A. ADMINISTRATIVE DATA USAGE No Subscriber fees are charged to the Distributor, Distributor Affiliate or Service Facilitators where the data is used for advertisement, demonstration, product development, and customer support (customer support usage does not include use of the data by the Distributor s personnel to provide securities transaction services, or securities quotations, or otherwise support customers trading securities through the Distributor). Distributor is not required to include such usage as part of its regular reporting obligations, but is required to receive prior approval for the number of Interrogation Devices accessing TMX Market Data for the purposes listed above, and will provide information on such access at mutually agreed intervals or in the event of an audit. In lieu of assessing monthly charges upon Interrogation Devices utilized by Distributor for the purposes described above, at TSX s request, Distributor agrees to provide to TSX access to the Distributor s service to TSX by means acceptable to TSX to be used by TSX to monitor Distributor s compliance with the terms of the Agreement and any other agreements that may be entered into between TSX and Distributor. B. DATAFEED CLASSIFICATION A datafeed is classified as any delivery of data (either directly or indirectly from TSX facilities) to a mechanism which is not an Interrogation Device. An Interrogation Device is defined within the Agreement as any device that displays (or is capable of displaying) Market Data in any visible, audible, or other comprehensible form, to any Person at any time. For example, delivery of Market Data to a client server, whether at a client site or in a hosting facility would be classified as a datafeed, regardless of where the downstream Interrogation Device entitlement resides. A server by definition cannot be an Interrogation Device, and delivery to a server would be classified as a datafeed, subject to datafeed (distribution) charges and any applicable license fees. TSX reserves the right to determine what constitutes a datafeed at their sole discretion. C. DELAYED DATA Delayed data means Market Data that is delayed by a minimum of fifteen (15) minutes from the time of dissemination by TMX. Delayed feed access fees applies to Market Data that has been delayed at least 15 minutes, made available through various delivery or access methods (for example, data feeds, FTP, and XML), where the control over the use and redistribution of market data cannot be directly maintained by the Distributor. All Distributors must execute the appropriate documentation prior to Receipt of Market Data. Charges apply whether for internal or external use. Market Data may only be disseminated in a delayed fashion as expressly provided within the Exhibit A (i.e., distribution of delayed Level 2 data is prohibited). D. DERIVED DATA AND NON-DISPLAY APPLICATIONS Market Data includes but is not limited to the creation of original works which are based in whole or in part from the Market Data that (a) can be reverse-engineered to recreate the Market Data, and/or (b) is a reasonable facsimile of the Market Data. If the creation of the original work does not meet the criteria outlined in (a) and/or (b) above, it will be considered to be derived data, and not subject to end user fees, or downstream Subscriber agreements. Page 11

13 Any proposed use of the Market Data (including, but not limited to, developing, distributing or disseminating any modified or derived information or product based upon or generated from, in whole or in part, the Market Data) not approved by TSX and described in Exhibit A shall require the prior written approval of TSX which approval must specifically reference such proposed use. Any proposed new use shall be submitted to TSX in the form of a draft amendment to Exhibit A. TSX shall notify Distributor in writing within a commercially reasonable amount of time whether it approves or disapproves of any such proposed use by Distributor. Fees will be based on what data the Distributor is in receipt of, plus appropriate license fees. E. MONTREAL ORDER ROUTING Distributors of Montreal Market Data who facilitate routing orders to the Montreal Exchange on behalf of their Subscribers, and constituting the majority and primary purpose of their business as determined by TSX, may be classified as an Order Routing Distributor. Order Routing Distributors must complete a TMX Group Market Data Distribution Agreement and Exhibit A and will be charged the applicable Order Routing Distribution fees. All other TMX Group policies and procedures will remain in full effect, including the reporting responsibilities of their Subscribers. F. DISASTER RECOVERY SITES Feeds and Interrogation Devices at disaster sites do not attract data charges as long as they are intended for the use of Distributors who normally pay Market Data charges at their live site, and as long as the Market Data is never used concurrently with Market Data at the live site. In the event that a Distributor switches from its live to its disaster site, the Market Data at the disaster site becomes liable for Market Data charges. Disaster sites should not have different access to market data categories than would be expected at their main site. G. ENTITLEMENT SYSTEMS TMX has an access-based rate structure which requires all Distributors to account for all interrogation devices that have been technically enabled to receive Market Data. To ensure the number of accesses to Market Data (via displays and/or Data feeds) being reported each month is accurate, the TMX requires Distributors to have an entitlement system in place. All Distributors receiving a Feed are subject to an audit of their end-user subscriber entitlement reporting methods. Unless the entitlement system is able to provide accurate historical/audit information, TSX will charge for all devices on your network. Administrative reports are not accepted in lieu of software-controlled entitlements. For audit purposes all entitlement systems must have the ability to generate entitlement reports from inception and be able to perform the following: 1. Each user must have a separate and unique ID/Password which is not shared. 2. Prevent or identify simultaneous access to the Market Data by the same user ID/Password. 3. Generate entitlement reports for each product to identify those users who are entitled to receive Market Data. 4. Provide an audit trail identifying all entitlement transactions (additions, deletions, etc.). If Market Data is fed into a network which does not control access to data, then all Interrogation Devices with access to that network must be reported as fee liable for all Market Data. Page 12

14 H. PER QUOTE METERING AND CAPPING Distributors disseminating Market Data on a per quote basis operate under the same terms and conditions of any other type of Distributor, however, special procedures are allowed for these Distributors as expressed hereafter. Once a Subscriber has been approved by the Distributors to receive Market Data, the Distributors must assign the Subscriber a unique, secure and controlled (valid username and password) Subscriber ID. Distributors are required to prevent concurrent Subscriber sessions. Distributors must maintain complete control over the access to Market Data and over administration of these Subscriber accounts. For each Subscriber ID, Distributors are required to meter on a daily basis the number of real-time quotes and to maintain appropriate electronic records of such usage. These records must be maintained for a period of not less than a two (2) year period and be provided to TMX upon request. TMX will allow Vendors the option to report monthly usage for those Non-Professional Subscribers that are under a per quote basis in terms of a number of Subscribers. This reporting method is often referred to as capping. Capping is a reporting method that provides the Distributor the ability to limit the monthly usage based fees resulting from the consumption of quotes by their Non-Professional Subscribers. Capping means to set a limit to the number of quotes that may be charged per Non-Professional Subscriber, which is equal to the monthly Non-Professional Subscriber fees outlined in the Schedule 1. If the Distributor decides to take advantage of the capping method, it will report during a specific reporting month, a total number of Capped Non-Professional Subscribers instead of adding the number of quotes consumed by these Non-Professional Subscribers to the total number of quotes consumed by all Non- Professional Subscribers for that reporting month. Professional Subscribers pay the monthly subscription fee, regardless of whether they access data on a continuous update basis, or on a per-quote or metered basis. Non-Professionals may access data on a continuous update basis, or on a per-quote or metered basis, and pay applicable fees. Quotes are to be metered from market open to (market close + 15 minutes). I. SERVICE FACILITATORS Service Facilitator means a third party authorized by TMX to receive Market Data from Distributor for the sole purpose of facilitating distribution of Market Data by the Distributor. Authorized Service Facilitators are listed by the Distributor in Exhibit A. TMX reserves the right to deny inclusion of a Service Facilitator to the Agreement. J. SOFTWARE DEVELOPER A Distributor considered a software developer by TMX, in its sole discretion, may be classified as an Internal Distributor and subject to the fees associated with such classification, as set out herein. A software developer means a Distributor authorized by TMX to receive Market Data for Internal Distribution for the sole purpose of facilitating the Distributor s software development efforts, as specified in Exhibit A. In the event that a Distributor: (a) distributes Market Data externally and/or to nonprofessional subscribers; and/or; (b) no longer receives Market Data for the sole purpose of facilitating its software development efforts, the Distributor may be classified as an External Distributor and subject to the fees associated with such classification, as set out herein. For certainty, the classification of a Distributor as an Internal Distributor or a software developer is made by TMX, in its sole discretion. K. UNIT OF COUNT TMX has an access-based rate structure which requires all Distributors to account for all interrogation devices that have been technically enabled to receive Market Data. Simultaneous access by unique user ID is prohibited unless the vendor or user firm is able to record, track and report the number of simultaneous accesses to the exchange. Where a Distributor entitles, but is unable to track and record more than one simultaneous access to a unique user ID the maximum number of potential accesses is to be reported to TMX. Page 13

15 L. TSX/CP EQUITIES NEWS If a Distributor is entitled to receive the TSX/CP Equities News product under Exhibit A, the following policies shall also apply. With respect to Distributor s receipt, processing, transmission and use of the TSX/CP Equities News product, Distributor agrees that: 1. Distributor will not, and will not authorize or permit any Person in receipt of the TSX/CP Equities News from Distributor to, archive the TSX/CP Equities News for more than 400 calendar days; 2. Distributor will not, and will not authorize or permit any Person in receipt of the TSX/CP Equities News from Distributor to, use the TSX/CP Equities News for any news creation or editorial purposes or to modify or alter the TSX/CP Equities News in such a way as to distort the editorial balance of the reporting; 3. Distributor will clearly identify: (a) advertisements and will not make advertisements appear as an integral part of the TSX/CP Equities News; and (b) the source of the TSX/CP Equities News; 4. Distributor will not delay nor authorize or permit the delay of any content forming part of the TSX/CP Equities News without TSX s prior written consent, and any delayed content so approved must be clearly identified as delayed; and 5. TSX may, in its sole discretion, remove and/or may direct Distributor to: (a) remove any item from the TSX/CP Equities News identified to be erroneous; or (b) issue a retraction or correction notice where removal is not practical. M. USE OF CONSOLIDATED DATA PRODUCTS If a Distributor is entitled to receive any Consolidated Data Products (as defined below) under Exhibit A, the following policies shall also apply. 1. With respect to Distributor s receipt, processing, transmission and use of the Consolidated Data Feed (CDF ), the Canadian Best Bid and Offer (CBBO ), the Consolidated Last Sale (CLS ), the Consolidated Depth of Book (CDB ) and any other products offered by TSX from time to time in its role as information processor for exchange-traded securities (together, the Consolidated Data Products ), Distributor agrees that: (a) prior to receiving the Consolidated Data Products, it shall have executed and shall ensure that any Person in receipt of Market Data from Distributor has executed a binding agreement with each Contributor (as defined below) to receive and use the Contributor s Data (as defined below) as part of the Consolidated Data Products (the Data Contributor Agreements ); (b) it shall, and shall ensure that any Person in receipt of Market Data from Distributor shall continue to maintain in force and to comply with the respective Data Contributor Agreements; (c) it shall, and shall ensure that any Person in receipt of Market Data from Distributor shall use the Consolidated Data Products in accordance with all of the terms, conditions, limitations and obligations imposed upon such Distributor or Subscriber in the respective Data Contributor Agreement and the applicable agreements with TSX; (d) it will not and will not authorize or permit any Person in receipt of Market Data from Distributor to display or distribute the entire order book for the Consolidated Data Products; and (e) it will only license the Consolidated Data Products to Subscribers who have complied with the terms and conditions above. Page 14

16 2. TSX may terminate or suspend Distributor s or Subscriber s access to and right to use any of the Consolidated Data Products if: (a) the Distributor s or Subscriber s respective Data Contributor Agreements have: (i) not been duly executed; (ii) expired; or (iii) been terminated; or (b) where access to such Consolidated Data Products by Distributor or Subscriber has been suspended by the Contributor for any reason, all without any responsibility or liability whatsoever on the part of TSX. 3. Terms not otherwise defined in this Section K or the Agreement shall have the following meanings: (a) Contributor means each Third Party Contributor that provides data which is incorporated into the Consolidated Data Products and includes, without limitation, new marketplace entrants. (b) Contributor s Data means data supplied by a Contributor for use in the Consolidated Data Products. N. USE OF S&P/TSX INDICES DATA Notwithstanding anything to the contrary herein, neither Distributor/Subscriber or Distributor/Subscriber Affiliates shall use any of the S&P/TSX Indices or any information related thereto as a component of any product or financial instrument or any index to be developed, marketed, maintained, calculated and/or promoted by Distributor/Subscriber, including, by way of example and without limitation, any indexed money fund based on any of the S&P/TSX Indices in whole or in part, or to use or refer to any S&P or TSX marks (including, without limitation, TSX, Toronto Stock Exchange Standard & Poor s, S&P ) in relation to any S&P /TSX indices in connection with the distribution, marketing or promotion of any product or financial instrument or index. Distributor/Subscriber agrees and understands that any such use requires a separate license agreement from S&P. The Global Industry Classification Standard ( GICS ) was developed by and is the exclusive property and a service mark of MSCI Inc. ( MSCI ) and Standard & Poor s Financial Services LLC ( S&P ). Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. The S&P/TSX Index data ( Index ) is a product of S&P Dow Jones Indices LLC and TSX Inc. and has been licensed for use by Distributor/Subscriber. All rights reserved. S&P is a registered trademark of S&P. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ). TSX is a registered trademark of TSX Inc. Neither S&P Dow Jones Indices LLC, S&P, Dow Jones, TSX Inc., their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none such entities shall have any liability for any errors, omissions, or interruptions of any index or any data related thereto. Page 15

17 SECTION III AUDIT POLICIES AND PROCEDURES Best Practice Recommendations on the Market Data Audit Process A. OVERVIEW The Best Practice Recommendations are intended to set out in general terms a minimum standard of good practice and cooperation between the parties to an audit. The Best Practice Recommendations outlines the obligations, responsibilities and expected behaviors of both the Audited Party and the Content Provider. They are based largely on the practical experience of exchange, vendor, and consumer representatives. For experienced audit teams, they contain nothing new. However, observance of the practices set out in the document would significantly increase the confidence in the audit process and set a basic standard of consistency and efficiency for the industry. This document was produced by the FISD Audit Working Group. The FISD Audit Working Group is composed of individuals representing a diverse spectrum of FISD member firms including exchanges, vendors, consultants and consumers. The document and particularly the recommendations contained in the document represent a consensus resulting from significant discussion and debate among the Working Group members. It should not be inferred that all FISD members (nor even all FISD Audit Working Group members) are in agreement with all recommendations nor should it be inferred that any particular FISD member is currently employing each of these recommendations in its policies and/or contracts. The Audit Best Practice Recommendations, including the Appendix A will not infringe or override any existing rights or obligations. The Best Practice Recommendations recognize that contractual terms relating to data audits may vary considerably. The Audit Best Practice Recommendations are entirely voluntary, and Content Providers and Audited Parties reserve all rights available to them under existing contracts. References or correspondence relating to the process of audit set out in this document shall not be represented or construed as any form of statutory audit opinion or regulatory activity on the part of the Auditing Party. It is important to note that the Best Practice Recommendations apply across an extremely wide spectrum of audits from international Vendors to single site consumer firms. They are not intended to be a detailed prescription or audit program. In some cases Auditing Parties/Auditors and Audited Parties may wish to plan greater levels of detail or tighter time frames than the document contains. They may also wish to record their agreement via some form of Service Level Agreement. This would be entirely consistent with the aims of the Best Practice Recommendations. In other cases the level of detail contained in this document, or its suggested reports, may be deemed inappropriate. Where this is the case, the underlying principles on which the Best Practice Recommendations are based should still apply. In the context of this document, best practice means that the contractual purpose of the audit is achieved with reasonable care, maximum efficiency and minimum disruption to all parties. The Best Practice Recommendations shall also apply to any third parties involved in the audit process. B. GLOSSARY OF TERMS Auditor - The organization or individual that conducts an audit either the Content Provider or a Third-Party Auditor acting on its behalf. Audited Party The organization or individual that contracts or subscribes to receive the Information and is being reviewed by the Auditor. Content Provider - Any organization that disseminates Information that can be redistributed. Examples include, but are not limited to, exchanges, newswires, analysis services, and credit ratings agencies. Page 16

18 Information -The data that is disseminated by the Content Provider. Third-Party Auditor - An organization or individual that conducts an audit on behalf of a Content Provider. C. PRINCIPLES OF BEST PRACTISE 1. Overall Audit Approach All audit process participants should provide adequate support and co-operation to enable the audit to be conducted efficiently, in a timely manner and with reasonable care to ensure full compliance with the contractual obligations. 2. Confidentiality Confidentiality should extend to each and ALL parties involved in the audit process. All books, records and systems inspected in the course of an audit and all audit work papers should be regarded by ALL parties as strictly confidential. Content and discoveries from an audit SHOULD NOT: be used by the Content Provider or designated representative for any purpose other than the purpose of the audit, be circulated within the Content Provider except for audit review and administrative purposes, be disclosed to any third-party (unless they are parties to the contract or their consultants), including the audit representatives of any other Content Provider, nor be disclosed by a Third-Party Auditor to any other Content Provider represented by the same Auditor, without the prior written permission of the other party concerned. 3. Audit Purpose The audit purpose is to verify compliance with contract obligations and policies. In particular, the examination of the correct remuneration for the Information entitled and the identification of potential sources of error as well as the cure of potential errors. This involves verification and assessment of controls over Information at client sites. 4. Audit Frequency An Audited Party should not be audited by the Content Provider more frequently than once per year unless there is cause as determined by the Content Provider in accordance with the contractual provisions between the parties. More frequent audits may be performed at the reasonable discretion of the Content Provider taking into account the legitimate interests of the Audited Party. 5. Audit Period Typically, the audit period covers three years, but this may differ depending on the contractual rights of the Content Provider. Depending on the contractual rights of the Content Provider, the Audited Party may be expected to make available all documents relevant for the audit period. In the course of an audit the Auditor should not review any prior audit period, as defined in a previous audit report issued by the Content Provider, unless extraordinary circumstances apply. Page 17

19 6. Audit Policy Publication The Content Provider should have an audit policy and should have a contractual basis to maintain transparency. The audit policy of the Content Provider should be: (a) publicly available, i.e., on a website; (b) simple, clear and unambiguous; and (c) communicated to customers that hold direct agreements, notifying them of changes. Prior to an audit, the Content Provider should provide the Audited Party with a summary of the contractually-supported policy changes that have occurred since the last audit of the Audited Party. 7. Audit Consolidation A Content Provider may combine audit activities to reduce the burden on Audited Parties. This may be accomplished through: 1. standardizing pre-audit and onsite activities; and 2. shared usage of Third-Party Auditors provided confidentiality is observed. 8. Audit Training and Preparedness All participants involved with the audit process should be well trained, knowledgeable and well prepared in handling their respective roles in a timely fashion. 9. Third-Party Audits Content Providers may employ Third-Party Auditors to conduct the audit on their behalf. Content Providers should provide ready and reasonable access to its own personnel before, during, and after the audit so that issues related to policy and contract interpretation can be resolved. 10. Audit of Vendor s Redistribution Where the right exists contractually, the Content Provider may exercise the right to conduct audits of a Vendor s redistribution to downstream customers in accordance with the contract. Review of access declarations or Vendor reporting documents may assist in selection of these client sites for audit visits. Any sites selected for visits by the Content Provider should be notified in advance, where possible. The Vendor should assist with identification of the appropriate contact(s) at each client site. In addition, the Vendor should assist with communication between Content Provider and Vendor s downstream customer when no direct contract exists between these latter two parties. D. PREPARATION 1. Prior Notice Content Providers reserve the right to audit at the minimum notice periods as specified per contract, but Best Practice Recommendations may require longer notice periods to allow for effective audit planning and preparation. Page 18

20 Typically advance notice for audits is 30 days. A longer notice period for example up to 120 days may be considered in extenuating circumstances. Content Providers may audit at shorter notice where there is reason to suspect material non-compliance or by agreement between the parties. The Content Provider should consider reasonable concerns expressed by the Audited Party over specific firms and/or individuals engaged or employed by the Content Provider. In extenuating circumstances, a Content Provider should be prepared to enter discussions and reasonably consider the requests of an Audited Party regarding firms and/or individuals proposed to conduct the audit. 2. Audit Planning All participants to the audit should co-operate in a planning process (e.g., by exchange of correspondence and/or meetings) to ensure that: the period, timing, product(s) scope and location(s) subject to audit are identified on a best endeavors basis and reasonable; all records necessary for the audit are identified and made available for inspection; adequate resources and time are allowed for the audit by both the Audited Party and the Auditors; the Auditors will consider the operating needs and requirements of the Audited Party during the planning process; the Letter of Engagement (see sample in Appendix A) should communicate to the Audited Party a copy of the latest contract or policy; the location of relevant records and systems is identified; the Auditors has sufficient access to relevant staff of the Audited Party and any necessary data; audit enquiries and pre-audit information requests are promptly addressed; and procedures for closing the audit are communicated. The pre-audit information collected should be analyzed prior to the audit providing this was received in a timely fashion. Appendix A provides additional guidance and suggestions regarding pre-planning for the audit. E. ON SITE 1. Cooperation All Participants to the audit should co-operate in the on-site audit to ensure that: all records necessary for the audit are identified and made available for inspection; adequate resources and time are allowed for the audit by both the Audited Party and the Auditors; the Auditors will consider the operating needs and requirements of the Audited Party during the audit process; Page 19

21 any further work identified in the course of the audit as necessary to investigate areas of potential exposure is discussed and arranged as soon as possible; and areas of possible contract interpretation differences are identified and discussed. 2. Audit Queries The Auditor and the Audited Party should attempt to resolve audit queries on site. Unresolved queries or resulting follow up items may be dealt with as described in Section F-1 below. 3. Audit Findings The Auditor should present audit findings with supporting documentation. The lack of documentation may not indicate a reporting error, but may constitute a failure to comply with the terms of the Content Provider s agreement. The Auditor should disclose and include the following: documentation to support audit findings; if applicable, lack of cooperation or documentation by the Audited Party; and preliminary estimation of the audit findings. If an Audited Party fails to cooperate or does not provide adequate documentation, the Auditor may request: additional information, validation tests, client site visits, termination of the contract, and/or impose further sanctions pursuant to the contract. The Auditor and the Audited Party should work together in good faith to resolve any differences in opinion arising from the audit and in any cases where there is evidence of non-compliance but the loss to the Content Provider cannot be clearly quantified. Any liabilities and/or credits calculated as a result of an audit should be in accordance with the contract. 4. Exit Meeting The Auditor and the Audited Party should discuss the audit findings to: summarize preliminary findings and current issues outstanding; provide a preliminary view of audit recommendations; obtain feedback from the Audited Party on audit findings and recommendations; establish an approach and time-frame for resolving outstanding issues; and Page 20

22 propose a time-frame in which audit results are communicated. The Auditor should provide the Audited Party with the following: a list of outstanding items; and source of the documents that support audit findings. The Auditor may set a deadline for the settlement of the to-do list. In case of failure to comply with this deadline without valid reason(s) the audit findings report may be prepared on the basis of the information and documents available at the deadline. F. AUDIT RESULTS AND REPORTS 1. Audit Follow-up Process The audit follow-up is typically a multi-step process. Generally the Auditors will follow an on-site visit with questions and requests for additional information and verification from the Audited Party. 2. Audit Report Assuming all issues outstanding at the exit meeting are resolved in a timely fashion, it may be possible to issue an audit report within three months of the site exit meeting. This report should typically include the following: audit findings, deliverables, and recommendations; deviations from the terms of the Agreement and policies; and responses or summary responses from representatives of the Audited Party. The Audited Party may give feedback on the audit report within a deadline as agreed between the parties. Should the Audited Party not provide feedback within the agreed deadline, the results of the audit as set down in the audit report may be considered to be undisputed facts and can be used as the basis for the audit settlement. 3. Audit Settlement Fee liable audit findings settled by the Audited Party should be regarded as the final settlement for the Content Provider for the agreed audit period, locations and applications as defined in the audit report. Where a Content Provider has reason to believe there are discrepancies in reporting and requests an additional audit, this should be supported by an indication of material discrepancies and / or contract violations. This may include the audited party failing to provide sufficient access to or demonstration of applications and / or relevant requested documentation for example permissioning reports. This should, where possible, be included in an audit findings report. Audited Party under reporting The period of liability for under payments discovered during an audit should be equal to the period as agreed between the Audited Party and Content Provider prior to the commencement of the audit. Audited Party over reporting When an audit identifies that the Audited Party has been over- reporting its usage of a Content Provider's Page 21

23 information across the agreed audit period, the Content Provider may take into consideration any and all relevant information from the Audited Party in conjunction with its own contractual and policy provisions regarding over-reporting and retro-active reporting changes. 4. Closure The Content Provider and the Audited Party should exchange communication to signify that the audit is closed. Page 22