By Euan Rocha
TORONTO, Nov 4 (Reuters) - The rivalry between Canada's TMX
Group Ltd X.TO and smaller rival Aequitas Innovations Inc is
set to intensify as the two exchange operators race to create
platforms for the buying and selling of some actively managed
funds.
Two sources with knowledge of the plans, who asked not to be
named as details are not yet public, said Aequitas is aiming to
launch a platform that will be operational in the first quarter
of 2016.
Aequitas, owned by Canadian financial players including
Royal Bank of Canada RY.TO and some pension and mutual fund
managers, declined to comment.
With trading fees in existing markets like stocks getting
squeezed, exchange operators have been looking to launch new
products to boost revenue.
At the same time, the investment industry is under pressure
from regulators to be more transparent on fees, forcing fund
companies to make their products more competitive.
In October, Invesco Canada launched what it calls
platform-traded funds (PTFs), an actively managed investment
vehicle with lower fees than traditional mutual funds. The
instruments however, can currently only be traded within the
Invesco dealer network.
One of the sources said Aequitas is working with Invesco and
other partners to create a platform that would facilitate the
trading of such instruments across a much wider dealer network.
Aysha Mawani, head of corporate affairs for Invesco Canada,
said the fund manager was working with a third party to help
bring its PTFs to the wider market, but declined to name the
party.
"We are expecting an announcement of this new technology
platform next week," she said.
Separately, the TMX, which operates the Toronto Stock
Exchange, has invited members of the mutual fund industry to a
gathering on Wednesday to discuss how they can "work together to
meet the industry's evolving needs."
A document seen by Reuters stated the TMX is creating a
working group that will "foster cross-industry collaboration" in
the development of the platform, and the working group will be
holding meetings over the next three months.
The document indicated the exchange operator is working on
an offering dubbed TSX NAVex that would aim to facilitate the
trading of some actively managed funds, but it is unclear when
the offering would go live.
A spokeswoman for TMX said the company is engaging with some
members of the investment community on Wednesday to swap ideas,
but that it has no announcement or update to offer at this time.
(Editing by Jeffrey Hodgson, Bernard Orr)