The London Stock Exchange and Canada's TMX Group posted strong financial results on Friday as they filed their $3 billion merger deal with the Canadian authorities.

The exchanges said on Friday they had formally applied to have their merger approved by securities authorities in Ontario, Quebec, Alberta and British Columbia, all of which must pass the merger.

We recently initiated the approval process and look forward to working with the various federal and provincial authorities to achieve the necessary approvals, TMX Chief Executive Tom Kloet said in a statement.

The British exchange reported 2010 profit up 22 percent to 341 million pounds ($555.5 million), compared with 280 million in 2009 and well above a forecast of 314 million in a poll of 14 analysts.

TMX reported first quarter profits up 13 percent to C$64.3 million ($66.8 million).

The British exchange's share of domestic equities trading -- historically its top earning business -- has slumped in the past three years amid increasing competition from upstarts such as Chi-X Europe and Bats Europe, whose parent filed for an IPO on Friday.

We have seen strong growth in our fixed-income businesses, exchange-traded funds and derivatives. We are also starting to see positive impact from technology sales, Chief Executive Xavier Rolet told Reuters Insider TV in an interview.

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Rolet has been working to diversify the business since his appointment in May 2009, looking to derivatives trading, clearing and technology services for growth, and credited his strategy for the better-than-expected results.

Good growth in post-trade, technology and information was offset by a weak performance from all parts of the secondary markets with UK cash equities being the worst performer and the exception being fixed income, brokerage Numis said in a research note.

Last month the LSE's domestic market share fell below 50 percent for the first time in the UK exchange's 210-year history, Thomson Reuters data showed.

The group's main capital markets business was down 5 percent, while data services added 9 percent and technology services 23 percent. Its fledgling clearing business was the stellar performer, rising 217 percent.

Revenue increased 7 percent to 675 million pounds, above analyst expectations of 651.1 million. The total dividend for the period was 26.8 pence, above a forecast 25.9p.

LSE stock closed up 1 percent having risen more than 7 percent earlier in the session. TMX shares were flat.

Rolet's boldest move at the LSE is the $3 billion proposed merger with TMX, a deal that will enable the UK exchange to tap into TMX's stable of booming mining firms.

The LSE and TMX said they hope to complete the transaction in the latter part of this year.

(Editing by Sophie Walker and David Holmes)

($1 = 0.6140 pound)