Aequitas Innovations Inc. said BCE Inc. (BCE) and the Ontario Municipal Employees Retirement System have joined a group including Royal Bank of Canada and Barclays Plc as investors developing an alternate exchange in Canada.
Joanne Kearney, a spokeswoman with Aequitas, said BCE, Canada’s largest telecommunications provider, and Omers Capital Markets, which manages the public investments of government employees in Ontario, are founding investors in Aequitas and each assumed a seat on the board of directors as of yesterday.
Aequitas brought in fund managers as investors as it plans to compete for buy and sell orders in a Canadian market dominated by TMX Group Ltd., which owns the Toronto Stock Exchange, TSX Venture Exchange, Alpha and TMX Select trading platforms. TMX’s exchanges had about 82 percent of equity trading by volume as of June, according to data from the Investment Industry Regulatory Organization of Canada.
“To our knowledge, we will be the only exchange globally that has an ownership weighted towards the buy side,” Kearney said in an e-mail.
The investors, which also include CI Financial Corp., IGM Financial Inc., ITG Canada Corp. and PSP Public Markets Inc., each own no more than 15 percent of Aequitas, Kearney said. She declined to disclose individual stakes.
The Ontario Securities Commission yesterday submitted a request for comment regarding the proposal from Aequitas, ahead of a formal application for recognition as an exchange.
The company is proposing a “hybrid” market that will combine elements of traditional public stock exchanges with so-called dark pools, where some data on trades is not revealed in order to protect the interests of buyers and sellers. Aequitas said the exchange will be designed to “restrict predatory trading.” The hybrid market is the first of its kind and Aequitas has filed a patent for its design, Kearney said.
“We see untapped opportunity to use innovative technology and marketplace design in a way that promotes liquidity, fairness, cost savings and economic growth,” Aequitas said in a statement disclosing the BCE and Omers investments.
Aequitas plans to submit its application to the provincial regulator in late fall 2013 and expects to receive a recognition order next spring. The company’s exchange will be operational by late 2014.
Jos Schmitt, chief executive officer of Aequitas, was not available for comment, Kearney said. Carolyn Quick, spokeswoman with TMX Group, would not comment about the planned exchange.
“BCE has made a small private equity investment in Aequitas as a commercial partner providing communications solutions to our venture,” Jason Laszlo, a spokesman with BCE, said in an e-mail.
Omers, the country’s sixth-largest fund manager by assets, declined to disclose the size of its stake.
“Omers believes that Aequitas can create additional choice for trading in Canada -- bringing the buyers and sellers of securities together efficiently and cost-effectively,” Brent Robertson, director of trading at Omers Capital Markets, said in an e-mail statement.
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