Regulators and the securities industry are gearing up for the launch of trading next week on the new industry-led trading venue, Aequitas NEO Exchange Inc.
The Investment Industry Regulatory Organization of Canada (IIROC) issued a bulletin Wednesday indicating that Aequitas intends to start trading on March 27, with two trading books (its “lit book” and its “NEO Book”) as well as a crossing facility. A dark book will be launched later, it notes.
IIROC says that the lit book will operate as a fully transparent marketplace providing pre-trade transparency of orders and post-trade transparency of executions. It will be open for continuous trading between 9:30 and 16:00 ET.
The NEO Book will also operate as a transparent market, although the pre-trade transparency will be on an aggregated basis by price; and, it will offer post-trade transparency of executions. It will be open between 8:00 and 17:00 ET. The NEO Book will also impose speed bumps on certain high-speed traders to prevent them from gaining an advantage over ordinary retail traders.
IIROC says that each trading book will be regulated as a separate marketplace, and that only IIROC members are eligible to be participants of Aequitas, which will offer trading in TSX and TSX Venture listings, along with its own listings. Initially though, only certain TSX and the TSXV listed securities available for trading. Orders entered on both books will be considered protected orders, IIROC notes. Regulators are currently considering possible amendments to the order protection rule, but they have yet to proceed with any new policy in this area.
Last week, Aequitas announced that it has received regulatory approval for its proposed market data fees, and that it has also attracted new shareholders and raised more capital from a pre-launch share offering.
Its list of new shareholders from the dealer community includes Jones Gable & Co Ltd, Maison Placements Canada Inc., BBS Securities Inc. and Don Ross, chairman of Jones Gable & Co Ltd. And, from the buy side, it added British Columbia Investment Management Corp. (bcIMC), Davis Rea Ltd, Invesco Canada Ltd, and Vernon & Park Capital L.P., the firm said.
“We are confident that the NEO Exchange will become an important tool for advisors to help their clients build and protect wealth,” said Peter Intraligi, president & chief operating officer, Invesco Canada Ltd., in a statement accompanying the announcement.