The $3.8-billion takeover bid for Canada’s largest stock exchange by a team of Canadian banks, insurance companies and pension funds has received approval from the TMX Group’s own directors.

Luc Bertrand, head of the Maple Group, said on a conference call Monday that he is pleased that the TMX board will advise shareholders to accept their deal that would create a bigger Canadian exchange.

“Today’s agreement is the result of months of productive discussions,” he said.

“This is a proven and highly valued business model that we all believe can create significant value for TMX Group.”

The consortium of 13 Canadian banks and insurance companies wants to merge the owner of the Toronto Stock Exchange with the alternative Alpha Trading System, and clearing and depository firm CDS Inc.

Alpha and CDS are owned by the major players in the Canadian securities industry, several of which are part of the consortium.

Thomas Kloet, CEO of TMX Group said the two sides will work together to ensure the deal is approved by Canadian securities regulators and the federal Competition Bureau.

“We look forward to the process ahead,” he said.

Independent firms have expressed concerns about whether the bank’s will play fair and grant them cost-effective access to clearing and settling trades.

Critics say the deal would create a virtual monopoly that could lead to higher fees and create enforcement and transparency issues.

But Kloet said fair fees and open access is both trading and clearing “is a cornerstone” of the deal.

Shares of the TMX Group were still below the offer price on Monday morning, suggesting that some investors may still be skeptical about whether the deal will receive regulatory approval.

The company’s stock was up two per cent, or 92 cents, to $43.28 on the Toronto Stock Exchange.

The future of the TMX has been a major issue not only on Bay Street but also in Ottawa, where an earlier deal that would have seen the company acquired by the London Stock Exchange raised fears that Canada’s stock markets would come under foreign control.

The LSE bid eventually failed as shareholders rejected the offer in the wake of the Maple Group rival bid.

Kloet said the now friendly merger will help Canada’s stock markets expand and grow.

Bertrand, who was once head of the Montreal Stock Exchange, said Maple Group is confident it can get regulatory approval for the deal by early next year.

However, the group once again extended a shareholder deadline to tender their shares, which had been set for Monday. Shareholders now have until Jan. 31, a date that could be pushed back until April 30, if it takes that long to gain regulatory approval, Bertrand said.

The Maple Group is a consortium of financial companies and pension funds and had been in talks with the TMX since last summer.

Backing of the takeover from the TMX board comes after the TMX initially sought a merger with the London Stock Exchange.

But that friendly merger was called off earlier this year because there was not enough TMX shareholder support in the face of the richer Maple bid.

TMX owns the Toronto Stock Exchange and the junior TSX Venture market as well as the Montreal Stock Exchange.

Maple Group investors include the Alberta Investment Management Corp., Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC World Markets, Desjardins Financial, Dundee Capital Markets, Fonds de solidarite des travailleurs du Quebec, GMP Capital, National Bank Financial, Ontario Teachers’ Pension Plan, Scotia Capital, TD Securities and Manulife.

The offer is to acquire between 70 and 80 per cent of the shares of TMX Group for $50 per share — part of an integrated acquisition transaction to acquire 100 per cent of TMX shares.