Canada's Aequitas unveils plan to launch new fund trading platform

By Euan Rocha
TORONTO, Nov 12 (Reuters) - Canadian exchange operator
Aequitas Innovations Inc unveiled a plan on Thursday to launch a
new platform that will enable some actively managed mutual funds
to be traded and settled with the same ease as publicly listed
stocks and exchange-traded funds.
The plan, first reported by Reuters last week, will let
investment advisers in Canada trade so-called Platform Traded
Funds, or PTFs, that were first launched by Invesco Canada last

PTFs are actively managed investment vehicles with lower
fees than traditional mutual funds. The instruments can,
however, currently only be traded within the Invesco dealer
network.
Aequitas' new PTF Connect platform, which is set to launch
in the first quarter of 2016, will help facilitate the trading
of such instruments across a much wider dealer network.
The move comes as the investment industry is under pressure
from Canadian regulators to be more transparent on fees, forcing
fund companies to make their products more competitive.
At the same time, as trading fees in existing markets such
as stocks being squeezed, exchange operators are looking to
launch new products to boost revenue.
The Chief Executive of Aequitas, which is owned by the Royal
Bank of Canada RY.TO and some pension and mutual fund
managers, said he sees the PTF Connect platform in time
accounting for over 10 percent of the company's revenue.
"This can become an important component of our own revenue
flow and it is a win-win for everyone," said CEO Jos Schmitt, in
an interview.
He added Aequitas, which just launched its NEO exchange in
March, has already begun to see gains in trading flows on NEO
and that it was also making major progress in attracting its
first listings.
Separately, Invesco said it sees retail investors benefiting
from PTFs, as it will give them access to active management at
prices comparable to those paid by institutional investors.
Sources last week told Reuters that TMX Group Ltd X.TO ,
which operates Canada's dominant Toronto Stock Exchange and TSX
Venture Exchange, is working on an offering to rival the
upcoming Aequitas PTF Connect platform.
TMX last week invited members of the mutual fund industry to
discuss how they can "work together to meet the industry's
evolving needs."
A document seen by Reuters stated the TMX is working on an
offering dubbed TSX NAVex that would aim to facilitate trading
of some actively managed funds. It is unclear when the offering
would go live.