The focus of the new exchange is fairness — it aims to eliminate what it calls predatory high-frequency trading practices, in which technology allows some traders to buy securities faster than others. The Neo exchange is meant to be a counter to the Toronto Stock Exchange and TSX Venture Exchange, which are owned by the TMX Group Ltd.
"At Aequitas we are on a journey to redefine the role of the stock exchange," said the exchange's president and chief executive Jos Schmitt, at the launch. "We are making the pie bigger for those that are seeking new opportunities."
He added that Neo would enhance investor confidence, re-energize traders and revive the success of capital-raising companies. He said there was a need for competition in the exchanges, and that Neo would pressure "monopolistic cost structure" of the current exchange.
"The new exchange is there to level the playing field, and to bring fairness back into trading," Schmitt said. "Investors big and small, young and old, you have a fair chance to participate."
To start, 45 securities will be traded on Neo. It is the first phase of the exchange, said Schmitt. Soon companies can list securities as well as trade them on the exchange.
The exchange is owned by a host of big-name stakeholders, such as OMERS Ventures, Barclays Corp. Ltd., Royal Bank and others.
Ontario Finance Minister Charles Sousa was on hand to speak at the launch. He said Neo has already brought competition to Canada's exchanges.
"The Aequitas Neo exchange helps to improve liquidity, helps to provide access to the private sector and capital markets," he said. "And you've already been disruptive. You've created competition. And that's a good thing."