National Post (National Edition)

Canada’s ‘Nasdaq’ latest rival to take on TSX on listing fees.

Promises to slash cost, with ample liquidity

- BY BARBARA SHECTER

TORONTO • The latest rival to take on the mighty Toronto Stock Exchange is pitching a cheaper road to becoming a public entity with the launch Tuesday of a new service to lure companies to list on the exchange.

But Jos Schmitt, chief executive of Aequitas NEO Exchange Inc., said the upstart — which launched a complement­ary trading business in March — doesn’t plan to fall into the trap of predecesso­rs who competed with the TSX primarily through lower fees when it came to listing company shares on their exchange.

“When you look at fees, that’s easy to put on the table,” said Schmitt, whose exchange will list corporatio­ns for initial fees that are up to 67 per cent lower than the rival Toronto Stock Exchange. Annual fees will be up to 55 per cent lower than TSX’s charges for similar sized companies.

However, “you don’t compete on fees only,” he said in an interview ahead of the official launch.

Aequitas has put mechanisms in place to offer a shot at reliable and consistent liquidity, which facilitate­s more trading, through designated market makers matched to companies that will get a cut of the resulting trading in return.

The upstart also plans to eschew charging for real-time market data on trading. Canada has been criticized for high market data fees, which Schmitt said has meant many potential traders don’t even look at Canadian markets.

“The overall strategy is bring value and then come with a fair price,” Schmitt said.

Aequitas is backed by heavy hitters in the market, such as Royal Bank of Canada and Barclays, one of the biggest market makers on the New York Stock Exchange. But taking on the dominant Toronto Stock Exchange has proven tough for rivals.

ISS Proxy Advisory Services recommende­d voting in favour of all board members in its report ahead of the meeting, though it gave Amaya a lessthan-stellar eight out of 10 as its governance risk score.

On June 8, Amaya begin trading on Nasdaq’s Global Select Market, achieving a dual listing on an American-based stock exchange, along with the Toronto Stock Exchange, almost four months ahead of company prediction­s.

“We were looking for more liquidity and more exposure. I think it’s great that a Canadian company that started on the Venture (Exchange) graduated to the TSX and has now gone to the Nasdaq as well,” said Baazov.

Amaya is now trying to access U.S. gambling clientele despite there be- ing only three states that have officially legalized online gambling: Nevada, New Jersey, and Delaware.

Of these, only Nevada has sites actually up and operating.

Last month Baazov said he expects PokerStars to be licensed by New Jersey gaming regulators in the third quarter of this year and says he also sees “positive movement” in Pennsylvan­ia and Michigan.

Amaya has been actively lobbying U.S. legislator­s to create a taxable regulatory regime for online gambling, in place of the bans across most states. Amaya has representa­tives taking part in hearings on the matter in California.

“We don’t have a crystal ball, and when it comes to politics I definitely don’t like trying to make prediction­s. All we can say is that we’re very comfortabl­e with some of the movement we’ve seen. If anything, it’s inching towards more and more (workable) regulation,” said Baazov. “We’re giving a lot of informatio­n showing statistica­l data, showing responsibl­e gaming data, showing what technologi­es have been innovated and applied at Poker Stars. We’re sharing it with others to show that you can have this in a regulated fashion and have that tax efficiency while you are protecting consumers as well.”

In addition to wanting to double its number of online poker users in the next five years, Baazov says Amaya will be moving into other online services in the next six months to a year.

“We believe we are a tech company at heart. Where we plan to go with this is not just gaming,” he said. “We’re excited about leveraging technology in order to acquire more consumers, but not to push them towards gambling — to give them what they want.”

 ?? RYAN REMIORZ / THE CANADIAN PRESS ?? The Amaya Gaming Group has acquired PokerStars and Full Tilt Poker for $4.9 billion and is now trying to access U.S. gambling clientele despite there being only three states that have officially legalized online gambling.
RYAN REMIORZ / THE CANADIAN PRESS The Amaya Gaming Group has acquired PokerStars and Full Tilt Poker for $4.9 billion and is now trying to access U.S. gambling clientele despite there being only three states that have officially legalized online gambling.

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