Why did Canada need a new stock exchange?
In the beginning, the core purpose of a stock exchange was simple:
Create a venue where investors can build wealth through their investments, while helping companies raise the capital they need to grow.
Investors had a level playing field and companies benefitted from a reliable price formation process. It was win-win. Together, these simple ideals supported growth and progress, drove our economy, and created jobs.
But as stock exchanges themselves went public and became more focused on their own profitability, their "purpose" shifted. They began to approach the listing of companies as mere transactions in order to get more revenue through the door. They enabled predatory trading practices which benefited their own bottom line to the detriment of long-term investors.
At NEO, we believe an innovative re-focus on the fundamental values of a stock exchange can reverse the harmful behaviours of most for-profit stock exchanges and give companies, dealers, and investors access to a stronger, fairer, and more transparent stock exchange.
A Level Playing Field for Trading
Predatory High-Frequency Trading (HFT) generates significant trading fees for incumbent exchanges and other marketplaces through sheer volume. Such traders willingly pay exorbitant fees for additional trading advantages, including co-located trading technology and access to faster market data.
At NEO, our trading solutions combat this by using a speed bump and unique order-matching technology that give long-term investors a fair chance to participate without being continuously outpaced. We believe HFT can add substantial value to the markets, but certain strategies enabled by incumbent exchanges and other marketplaces, are just unfair and unacceptable.
Free Real-Time Market Data
Incumbent exchanges generate a steady income stream by charging high market data fees. The magnitude of these fees prevents true consolidated market data in Canada, meaning that investors can not make informed investment decisions, issuers are not able to show the real depth of their liquidity, and when the TMX has an outage, the Canadian markets come to a grinding halt.
At NEO, we provide free real-time market data for all NEO-listed securities, and free or low-cost real-time data for all TSX/TSX-V/CSE-listed securities traded on NEO. Our commitment to providing unfettered access to market data gives everyone an equal opportunity to see a more complete view of the market and make better-informed trading decisions. NEO has been and will continue to be a vocal advocate for consolidated real-time Canadian market data to be mandated by the securities regulators.
Listing Companies Who Are Ready to List
Companies pay generous listing fees to incumbent exchanges, despite the lackluster service they have typically received, and regardless of whether their listed securities trade successfully or enable efficient raising of capital. At NEO, each company that lists with us is a valuable partner and their success is our priority. After all, successful issuers lead to successful investors. If a company isn’t ready for a public listing, we will help them facilitate an efficient private placement through DealSquare.
At NEO, we continue to develop innovative solutions that help drive more efficient and affordable markets. Our unique order-matching model, randomized “speed bump” to restrict predatory HFT, efficient new vehicles to help companies list efficiently, and the digitization of the private placement process for raising capital are just a few bold ideas we have introduced to Canadian capital markets where other exchanges failed to take action.