Market participants in Canada remain hesitant about the market landscape while they await the decision by regulators on the TMX Group acquisition by Maple Group.

The TMX-Maple deal has “put everything into a state of suspended animation, if you will, since last summer,” said Richard Carleton, chief executive officer of the Canadian National Stock Exchange.

The regulators mulling over the acquisition of TMX Group by Maple are considering several key issues, including the combination of the two largest trading venues in Canada, and also the vertical integration of the trading process. Maple’s plan for acquiring TMX also include combining the exchange with Alpha Group, which is the operator of the Alpha Exchange, the second largest trading venue in Canada behind the Toronto Stock Exchange. Together, the venues trade some 90% of equities in Canada.

Some of the backers of Maple also happen to be owners of Alpha, which create certain conflicts of interest. In addition, the group also plans to acquire and consolidate with Canada’s clearing house, CDS. It would create a vertically-integrated silo model, which was also a great point of concern for regulators examining the failed NYSE Euronext-Deutsche Borse merger.

“Unless there is serious opportunity for regulatory oversight, (the deal) will have a major impact on the competitive balance in Canada,” said Carleton.

TMX Group and suitor Maple Group last month announced in a joint statement that the Ontario Securities Commission and the Autorité des marchés financiers, the financial regulatory body in Québec, have each given signs that the deal’s approval process is looming, after months without any significant new developments.

Alpha was founded in 2007 by a group of banks looking to compete with the TMX, in the hopes of driving down fees and bringing an alternative to the markets. Some of those same banks are backers of Maple, including CIBC, TD Bank, National Bank of Canada and Bank of Nova Scotia. Another Alpha shareholder, Bank of Montreal, is not a member of Maple but it is advising TMX on its plan to merge with Maple.

Carleton’s CNSX is looking toward enhancing its presence, which begins with a new agreement with internet search giant Google, while waiting for the decision regarding the TMX-Maple deal.

“We were approached by Google, and we were engaged for some time on plans to upgrade the Google Finance portal and they were interested in working with us to provide real-time market data from CNSX,” said Carleton. “We want to maximize visibility and facilitate access to the retail customer to get information about real time trading activity on the exchange.”

The CNSX is a direct competitor to the TMX’s TSX Venture exchange and to a lesser extent, the main Toronto Stock Exchange and the newly transitioned Alpha Exchange. The CNSX focuses on smaller-cap companies looking to raise capital.

Carleton assumed the role of interim CEO of CNSX after Ian Bandeen stepped down in June 2011. Since taking over, Carleton has kept the ship steady and has continued to execute the company’s strategic plan. Prior to his appointment as CEO of CNSX, Carleton had been responsible for the development and operation of the company’s Pure Trading alternative trading system. Carleton has since become the CEO of the CNSX on a full-time basis.

The presence of CNSX listings on Google Finance is expected to help get the exchange into the limelight as an alternative to the TSX Venture exchange, but is also part of an overall plan to diversify its business operations.

Exchange clients have inquired into using the CNSX to also help trade over-the-counter products in the U.S., or also for access to European facilities, in particular Frankfurt, according to Carleton.

The exchange will look to build on the successes seen in 2011. For the year, the CNSX saw trading volume increase by 45% year-over-year, while listings also grew for the eighth consecutive year. It also recently launched an exchange-traded note initiative to diversify the types of products available to Canadian investment dealers and their clients. To date, it has 11 notes listed.