Upstart stock market on track to goals: CEO

The head of the Aequitas NEO Exchange says the upstart stock market is on track to reach its goal of snatching 20 per cent of Canada's trading volume within three or four years.

“We still have a long journey ahead of us in continuing to grow, but we are definitely, at this stage, ahead of what we anticipated,” said Jos Schmitt, the company's president and chief executive officer.

“I can only hope that we continue on that track.”

Since its launch three months ago, Aequitas NEO - which bills itself as a more fair alternative to the Toronto Stock Exchange and has backing from a number of financial industry heavyweights including Royal Bank (TSX:RY) and Barclays - has captured more than three per cent of trade volume.

In dollar value, it's taken close to five per cent of the market.

A number of other exchanges have tried to compete with the TSX, but none has succeeded in taking away significant market share from the Canadian giant.

Royal Bank has previously backed a TSX rival - Alpha Trading Systems, which was launched in 2008. But a few years later, in 2012, the trading platform was bought by Maple Group Acquisition Corp., which also acquired TMX Group, owner and operator of the Toronto Stock Exchange.

Schmitt, who once ran Alpha and left when the company was taken over by TMX, says the Aequitas NEO Exchange has unique features that he hopes will allow it to succeed where other TSX rivals have failed.

Among them is the exchange's use of a time delay, or “speed bump,” to deter predatory highfrequency trading (HFT) strategies.