TORONTO - TMX Group Inc., operator of Canada's main securities markets, reiterated its opposition Wednesday to granting full exchange status to a rival trading system operated by Canada's biggest banks.

TMX CEO Thomas Kloet, speaking on a conference call, said the bid by Alpha Trading systems raises conflict-of-interest issue between the banks that own it and the companies that would list their shares.

"As we list companies and as companies meet the standards that we set, we have to make a number of difficult calls (and) challenging decisions ... on a whole host of issues around the listings," Kloet told analysts after the company released its first-quarter financial report.

"Its my personal opinion that an entity that is controlled independently from the investment banks ... is far better able to adjudicate that than one that is closely controlled by the very investment banks bringing that (listing) forward," he said.

Asked if TMX Group (TMX:X) would be interested in acquiring Alpha in order to rid itself of a bothersome rival, Kloet refused to comment specifically.

Any acquisition, he said, "would have to revolve around an opportunity that both fits a strategic need and is accretive to shareholder value."

"We would look at anything that is both strategic and accretive and makes sense for both our shareholders and for the progress of the Canadian capital markets," Kloet said.

Earlier, TMX said its first-quarter net income increased to $49.1 million, 14 per cent above the comparable period of 2009, as the stock market operator brought in higher revenue and lowered operating expenses.

The profit was the equivalent to 66 cents per share with $139.7 million of revenue, slightly ahead of analyst estimates compiled by Thomson Reuters.

TMX Group says it benefited from a substantial increase in IPO activity at the Toronto Stock Exchange and TSX Venture Exchange and improved volumes on the Montreal Exchange derivatives market.

Operating expenses also improved slightly, falling by $1.2 million to $69.6 million.

However, the comparable first quarter of 2009 spanned the low point of a market correction that began in the final months of 2008 amid a global credit crisis.

The company generated $136.8 million in revenue in the first quarter of 2009, when there were almost no initial public offerings, resulting in net income of $42.9 million or 58 cents per share.

TMX will pay a dividend of 38 cents per common share on May 28 to shareholders of record as of May 14.

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