Source: The Canadian Press<\/i>

The head of Omega ATS, one of a handful of alternative trading systems for Canadian stocks, isn\u2019t scared of the possibility of a merged Toronto Stock Exchange and Alpha Trading Systems.

Omega ATS president Mike Bignell is confident he can take market share away from his much bigger rivals whether or not there\u2019s a takeover of the company that controls the TSX by a group that includes many of the owners of Alpha.

\u201cAt the end of the day, we\u2019re not afraid of competition and we\u2019re not afraid of the 800-pound gorilla,\u201d Bignell said.

The Maple Group, a consortium of some of Canada\u2019s biggest financial companies and pension funds, is looking to take control of the TMX Group (TSX:X) in a deal that values Canada\u2019s largest stock exchange operator at about $3.8 billion.

As part of its takeover plan, Maple wants to combine Alpha as well as CDS Clearing and Depository Services Inc. to create a bigger Canadian-based exchange. A combined of TMX and Alpha would control roughly 80% of the stock trading in Canada.

But even if Maple is successful, it wouldn\u2019t necessarily mean a return to the \u201cold boy\u2019s club\u201d controlling stock trading in Canada, Bignell said.

In addition to Omega, other alternative trading systems in Canada include Chi-X Canada and Pure Trading, which offer alternatives to the Toronto Stock Exchange.

Launched in December 2007, Omega grew its business 500% in the last year, according to Bignell.

He noted that the rules in Canada that require trades be executed at the best price, help the level the playing field for the smaller trading platforms.

\u201cJust because they\u2019re bigger doesn\u2019t mean they are going to always have the best price,\u201d he said, noting that the Toronto Stock Exchange controlled all of the trading in Canada not so long ago.

\u201cWhile they might start off with a combined 80%, we suspect that number would probably drop over the long term.\u201d

The Maple bid for TMX has stalled as the consortium awaits the necessary regulatory approvals including by the Competition Bureau. The group extended its offer to shareholders last week to the end of October as it awaits a ruling.

Some have argued the Maple deal would create a virtual monopoly that could lead to higher fees and create enforcement and transparency issues.

However Bignell focused his concerns on CDS, which acts much like a utility for the trading platforms by offering trade clearing and settlement services.

\u201cWe don\u2019t expect CDS to see any competition any time soon and this consortium will have a monopoly on that side of the ball here and some caution needs to be exercised for the pricing of settling securities in the future,\u201d he said.

TMX and Maple started formal discussions about a takeover bid in the summer after a proposed merger of the London Stock Exchange Group and TMX died because of a lack of shareholder support.

Maple\u2019s members are seeking a minimum of 70% and a maximum of 80% of the shares of TMX with an offer of $50 per share. The rest of the TMX stock would continue to be publicly traded and no Maple member would own more than 10% of TMX shares, in line with Ontario regulatory restrictions.

The investors in Maple: the Alberta Investment Management Corp., Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, CIBC World Markets (TSX:CM), Desjardins Financial, Dundee Capital Markets, Fonds de solidarite des travailleurs du Quebec, GMP Capital (TSX:GMP), National Bank Financial (TSX:NA), Ontario Teachers\u2019 Pension Plan, Scotia Capital (TSX:BNS), TD Securities (TSX:TD) and Manulife (TSX:MFC).<\/p>\n","protected":false},"excerpt":{"rendered":"

Bignell confident ATS can take market share away from much bigger rivals<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2318],"tags":[2617],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/304612"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=304612"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/304612\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=304612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=304612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=304612"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=304612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}