Market Fragmentation in Canada: The End of a Monopoly?
Report Summary
Market Fragmentation in Canada: The End of a Monopoly?
While the TMX Group still dominates the Canadian equities market, ATSs increasingly provide traders with lower-cost alternatives for trade execution and liquidity access.
Boston, MA, April 13, 2009 – A new report from Aite Group, LLC examines the Canadian equities market, and considers the increasing competition that alternative trading systems (ATSs) pose to the monopolistic TMX Group. The report tracks how changes in the Canadian market play into market developments and the overall strengthening of the equity market in Canada, and profiles key players in the country's burgeoning ATS space.
Despite what is essentially a monopoly held by the TMX Group on the Canadian market, the arrival of ATSs continue to receive a warm reception from Canadian broker/dealers. The liquidity that has been shifting to these alternative trading platforms makes it clear that financial institutions in Canada desire more than a single equities trading stronghold.
"The Canadian equities market is beginning to take a shape similar to that of the United States'," says James Kang, analyst with Aite Group and co-author of this report. "The successes of alternative trading venues in Europe and the United States make it tough to argue against the operation of such systems in Canada, which bring lower trading costs and greater technological advancements to the market. While market fragmentation is a growing concern in the Canadian equities market, it is not currently hindering the rise and growth of the country's alternative trading systems."
The report profiles all of the ATSs currently operational in Canada: Alpha Trading Systems, Instinet Chi-X Canada, ITG TriAct MATCH Now, Liquidnet Canada, Perimeter Omega ATS, and Pure Trading.
This 34 page Impact Report contains 18 figures and 9 tables. Clients of Aite Group's Institutional Securities & Investments service can download the report.