Aequitas Innovations Inc. (“Aequitas”) is pleased to announce that a formal exchange application for its new marketplace – the Aequitas Neo Exchange – has been filed with the Ontario Securities Commission (“OSC”) and the other securities regulators in Canada. In response to the application, the OSC has published a copy of the application for information and comments by all industry stakeholders. The deadline for comments to the OSC is Tuesday, August 26, 2014.
“We at Aequitas are on a mission to reverse the trends that currently trouble our markets, to restore confidence and to build a new exchange that puts the interests of investors and issuers first,” stated Jos Schmitt, President and Chief Executive Officer, Aequitas Innovations Inc. “We will do so through solutions that leverage technology, efficiency and innovation and with a governance model that maximizes issuer and investor participation. We encourage every market participant to comment on our application, make their voice heard and influence the future of Canadian capital markets.”
The Aequitas Neo Exchange application covers five key aspects of the Aequitas proposal:
Governance
Aequitas seeks to have an inclusive ownership structure that re-mutualizes the exchange business, but this time with the participation of all of its stakeholders. The broad and diverse ownership structure of Aequitas, with majority control by investors and issuers, and the independent governance oversight are built on the core founding principle of fostering innovation and competition, which will enhance market quality and promote the public interest. This governance model will ensure that Aequitas stays true to its mission.
Trading
The Aequitas Neo Exchange aims to curb 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 favour of long-term investors and others without speed and technological advantages, while continuing to facilitate strategies that add value. These trading solutions optimize the quality of execution, address issues that negatively impact investor and issuer confidence and mitigate the currently inherent conflict of interest between the financial interest of dealers and best execution for clients.
Designated Market Making
A market maker program committed to providing liquidity at all times, and across all securities, is critical to the investor and issuer. The Aequitas Neo Exchange 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. The program will promote reliable liquidity, quality price discovery and support the needs of investors and issuers by striking the right balance between the market makers’ obligations and benefits.
Listing
The Aequitas Neo Exchange proposed listing solutions are designed to promote companies ready to go public, introduce innovative products, and encourage investor confidence in Canada’s equity markets. They will provide issuers with a capital formation toolset that will promote their success and growth. A simplified listing process will eliminate unnecessary and unpredictable discretion and support greater transparency.
Fees
The Aequitas Neo Exchange is proposing innovative and affordable services and fees designed to place meaningful competitive pressure on incumbent players. In an effort to align the financial interests of dealers with the quality of execution interests of their clients, Aequitas will place pressure on the status quo and enable an evolution to a different fee model for all marketplaces in Canada.
“We are building the exchange of the future using a bold new blueprint that offers a common sense approach to trading and raising capital; that uses technology to empower and unlock, rather than discriminate and deceive; and that rewards those who capitalize and invest based on sound strategy rather than those who exploit structural loopholes,” added Schmitt. “The Aequitas Neo Exchange will represent a new kind of exchange that holds true to the principles of fairness upon which our industry is founded.”
The Aequitas Neo Exchange application follows the pre-filing comment process on certain aspects of the Aequitas solutions completed by the OSC in 2013. During this time Aequitas saw tremendous engagement by a wide variety of market participants where their call for meaningful competition and enhanced fairness was heard loud and clear.
The Aequitas Neo Exchange application, OSC Staff Notice and Request for Comments can be found here: http://www.osc.gov.on.ca/en/Marketplaces_pending-applications_index.htm
About Aequitas Innovations Inc.
Aequitas Innovations Inc. was founded by a diverse group of Canadian corporations, representing all market participants, working together to create the new user-focused Aequitas Neo Exchange and a private securities platform. Aequitas investors and commercial partners include: Barclays Corporation Limited; BCE Inc.; CI Investments Inc.; IGM Financial Inc.; ITG Canada Corp.; OMERS Capital Markets; PSP Public Markets Inc.; and RBC Dominion Securities Inc. For more information, please visit www.aequitasinnovations.com.
