The operator of the Toronto Stock Exchange said the deal will increase its recurring revenue as well as its revenue from outside Canada as it tries to build an “index factory.” On a conference call, TMX CEO John McKenzie said the RAFI acquisition “supercharges” the company’s ETF business. (The Logic)

Talking point: The number of passive U.S. equity funds has overtaken active funds over the past few years, putting more pressure on companies like TMX to meet the moment. RAFI, which was previously owned by California-based Research Affiliates, uses academic research to build indices and offers more than 90 of them, tripling TMX’s total assets under indexing. Closing the RAFI acquisition, which comes on the heels of its deal to buy Cboe’s Australian and Canadian equities businesses, would mean that more than half of TMX’s revenue would come from outside Canada.