Leading market participants join to form new Canadian stock exchange

Leading market participants join to form new Canadian stock exchange 
Aequitas seeks broad support to build innovative and cost-efficient exchange 
that levels the playing field for all market participants 

    --  A marketplace that protects investors against predatory and
        opportunistic trading strategies, and where all Canadian-listed
        securities can be traded.
    --  A senior listing service for companies ready for public
    --  Technological solutions and fee structures to reduce the
        financial burden on investors, issuers and dealers.
    --  An exempt market centralized capital-raising platform to
        provide early and mid-stage companies with access to capital
        and liquidity.

TORONTO, June 25, 2013 /CNW/ - Aequitas Innovations Inc. ("Aequitas") is today 
proud to announce its intent to enter the Canadian capital markets by 
establishing a new stock exchange that will seek to restore the original 
purpose of an exchange - the efficient allocation of capital between issuers 
and investors as a central force driving the Canadian economy. Aequitas was 
founded by a diversified group of Canadian corporations, representing 
professional money managers, pension fund managers, institutional and retail 
brokers, and Canadian issuers.

With a balanced, broad and open ownership structure, the founding investors, 
Barclays Corporation Limited; CI Investments Inc.; IGM Financial Inc. 
(Investors Group and Mackenzie Financial); ITG Canada Corp., PSP Public 
Markets Inc.; and Royal Bank of Canada, are seeking to apply innovation, 
technology and competition to improve fairness and efficiency in the markets 
with particular attention to the benefits of traditional investors and issuers 
- the cornerstones of the Canadian economy.

The Need for Improvement

"Through Aequitas, we have a compelling opportunity to create a level playing 
field for both retail and institutional investors by challenging certain 
predatory high frequency trading strategies which have impacted the quality of 
existing equity markets," said Greg Mills, Chairman of Aequitas, and Co-Head, 
Global Equities, RBC Capital Markets. "Marketplaces in Canada and around the 
globe are increasingly out of sync with their traditional users as they 
attract and cater to volume and revenue-generating trading over traditional 
investors and true market makers. Aequitas is designed to promote true and 
reliable liquidity, and will provide an operating model more aligned with the 
interests of investors and issuers to support market quality."

Aequitas believes that, while there are acceptable high-frequency trading 
(HFT) practices that can contribute to market quality across a variety of 
asset classes, certain predatory HFT strategies, such as latency arbitrage, 
rebate arbitrage and exploratory trading, impair the quality of execution for 
retail investors and for institutional investors representing the unit holders 
of pension plans and mutual funds. Additionally, these strategies negatively 
impact the liquidity of listed securities by discouraging true market makers, 
and result in excessive costs falling squarely on investors, issuers and the 
networks that support them.

"As marketplaces cater to volume, they can damage the quality of execution for 
those who actually want to hold something at the end of the day," commented 
Scott Penman, Vice-Chair of Aequitas and Executive Vice President and Chief 
Investment Officer for Investors Group, a wholly owned division of IGM 
Financial Ltd. "With assets of over $125 billion and a traded volume of 
Canadian equities in excess of $25 billion in 2012, Investors Group and 
Mackenzie Financial are significant long term participants in Canadian equity 
markets. A new and different exchange that serves long term investors, one 
that strikes the right balance between liquidity, price discovery and cost 
efficiency, is very exciting for us."

Aequitas is also concerned about the impact certain trading strategies, 
coupled with prevailing market conditions and the lack of innovative 
solutions, have on early and mid-stage companies seeking to access capital. 
New solutions, focused on making the capital formation process for small and 
mid-cap companies more viable, need to be developed to nurture those companies 
that will fuel the growth of the Canadian economy.

"We are at a critical crossroads for our markets and we are committed to 
bringing solutions to enhance trust in capital markets, challenge the status 
quo, and foster an exchange framework that will help support and grow the 
Canadian economy," added Mills.

The Aequitas Mandate

"We have been given a clear mandate by our founding investors: to serve the 
collective interests of investors, issuers and intermediaries and, as a 
result, the public at large," stated Jos Schmitt, President and Chief 
Executive Officer of Aequitas. "We believe competition will enhance 
confidence in Canada's capital markets, but more of the same won't address the 
issues that exist. Instead, we will tap innovation and technology to promote 
liquidity, fairness, cost savings and economic growth. This is the vision 
upon which Aequitas has been founded."

Aequitas will deliver on its mandate by meeting four key objectives:

  1. Always put the investor and issuer first, as directed by our

 balanced, broad and open ownership structure;
  2. Ensure quality markets and allow for sustainable market making;
  3. Introduce innovative and affordable services that foster 
 meaningful competition, reduce costs and improve market 
 efficiency; and
  4. Provide all types of issuers with solutions to access the capital 

     they need to grow.

The Aequitas Value Propositions

Schmitt continued: "Our solutions will be a highly differentiated set of 
services to meet the needs of the traditional investors and issuers. We seek 
to build a strong partnership between the exchange, issuers and market makers 
to promote true liquidity."

The Aequitas solutions will include:
    --  New market structure solutions that seek to restrict predatory
        and opportunistic trading strategies while challenging the
        dominant make-take fee model;
    --  Best-in-class smart order routing solutions available to all
        investors and dealers;
    --  Liquidity through sustainable market making;
    --  Highly competitive fee models across innovative trading,
        listings and market data offerings; and
    --  A centralized platform for exempt market securities focused on
        providing liquidity and strengthening the capital formation

To learn more about the Aequitas solutions, please visit 
www.aequitasinnovations.com to read our Position Paper.

Moving Forward

Aequitas' proposal to operate an exchange is subject to regulatory review with 
a formal exchange recognition application to be filed. This filing is 
currently planned towards the end of 2013. In the mean time, the immediate 
next steps for Aequitas can be summarized in one word - dialogue:
    --  Dialogue with investors and issuers to obtain further insights
        and ensure that our solutions truly address their issues and
    --  Dialogue with dealers, in particular the smaller and mid-size
        firms, to ensure that our solutions will provide them with the
        relief they need;
    --  Dialogue with regulators to explain our solutions and the
        benefit of enabling commercial solutions that will ensure more
        balanced and efficient Canadian capital markets that ultimately
        will lead to a stronger economy.

"Our ultimate objective is to improve market quality, promote fairness and 
foster economic growth with all market stakeholders in mind," concluded 
Schmitt. "To allow us to successfully execute upon this plan, market 
stakeholders' input is critical. We are looking forward to obtaining the 
industry's input and encourage all market participants to make their voices 

About Aequitas Innovations Inc.

Aequitas Innovations Inc. is a company founded by a diverse group of Canadian 
corporations, representing all market participants, working together to create 
a new user-focused Canadian exchange. Founding shareholders of Aequitas 
include: Barclays Corporation Limited; CI Investments Inc., IGM Financial; 
ITG Canada Corp., PSP Public Markets Inc; and Royal Bank of Canada.

Joanne Kearney 416.804.5949 joanne.kearney@aequin.com

SOURCE: Aequitas Innovations Inc.

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CO: Aequitas Innovations Inc.
ST: Ontario

-0- Jun/25/2013 11:00 GMT

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