PSP Investments and a group of financial services firms plan to launch a stock exchange to compete with the TSX.
The group, which calls itself Aequitas, wants to improve fairness and efficiency in the markets.
The other founding investors in the exchange are Royal Bank of Canada, Barclays, CI Investments, IGM Financial and ITG Canada.
“Through Aequitas, we have a compelling opportunity to create a level playing field for both retail and institutional investors by challenging certain predatory high-frequency trading strategies, which have impacted the quality of existing equity markets,” says Greg Mills, chairman of Aequitas and co-head, global equities, with RBC Capital Markets.
The group says that while there are acceptable high-frequency trading (HFT) practices that can contribute to market quality across a variety of asset classes, certain predatory HFT strategies impair the quality of execution for institutional investors representing the unitholders of pension plans and mutual funds.
The proposal is subject to regulatory review, and Aequitas plans to file a formal exchange recognition toward the end of the year.