The Great North is about to get a new stock market.
Aequitas Innovations announced that the leading Canadian equity market regulator, the Ontario Securities Commission (OSC) has approved the creation of the Neo Exchange. The OSC issued a formal recognition order on Tuesday, November 17, to Aequitas allowing it to move forward and set up the country’s newest bourse.
Click Here for the OSC Notice of Approval and Recognition Order
The exchange could be set up and operational as early as March 1, 2015, Aequitas said. Also, the operator expects to have its listing platform operational during the first half of 2015. The private markets platform will then follow, subject to regulatory approval.
“We are thrilled to receive approval from the OSC to move forward and launch the Aequitas NEO Exchange,” said Jos Schmitt, President & Chief Executive Officer, Aequitas NEO Exchange, in a release. “We appreciate the careful review undertaken by the OSC. We are now in a position to help promote confidence and build an exchange of the future using a bold new blueprint that puts investors, companies and their dealers first.”
The recognition order follows the Aequitas NEO Exchange application filed in June 2014 and a public comment period where an unprecedented diversity of market participants made their voice heard on the future direction of the Canadian equity markets.
The hook for the creation of the NEO Exchange will be a high-frequency trader free trading zone.
Neo’s formation was announced last June. Its stated goal is to protect investors against predatory trading strategies. It offers a senior listing service for companies ready for public listing and an exempt market centralized capital-raising platform to provide early and mid-stage companies with access to capital and liquidity.
Neo will employ anti-HFT and predatory trading strategies through tailored and targeted interventions, rather than a one-size fits all approach. The proposed technology and market structure model will enhance market quality by rebalancing the market in favor of long-term investors and others without speed and technological advantages, while continuing to facilitate strategies that add value.
Last, the new exchange will have a designated market maker program. DMMs are required to provide liquidity at all times, and across all securities. Neo is proposing a designated market-making program that will revive the role of the traditional market maker in Canada through the use of market structure innovation and technology.
All of these features, Aequitas said, should help promote Canadian equity market confidence and address the concerns of retail and institutional investors.
Aequitas is owned by institutional investors, public companies and dealers, with majority control by institutional investors and public companies to avoid conflicts of interest.
Also, before officially launching operations, the ownership structure will be further expanded, Aequitas added, with the aim of reaching an optimal representation of all types of market stakeholders – both small and large.
