Startup Canadian exchange Aequitas NEO is to waive all membership fees until reaching a 5% market share, the firm has announced.
The new trading venue is due to go live on 27 March and said it intends to provide a platform that meets the needs of investors and issuers better than current exchange business models.
Aequitas said it has opted to waive fees until it reaches its target threshold due to the high costs of connecting to new venues faces by members.
It has also revealed it will be adopting a take-take fee model for institutional orders on the NEO Book which charges both sides of a trade equally, while retail orders taking liquidity will pay no fees. NEO book is an alternative order book to its main lit book that provides speed bump delays to prevent latency arbitrage.
The main lit book will adopt a make-take fee model with priority for “non-speed advantaged users” intended to promote order resting from dealers providing liquidity and make them more likely to benefit from rebates.
The firm said it would prefer to do away with providing rebates, it is currently the prevailing model used by exchanges, however it hopes it priority for passive execution will help turn it to the benefits of long-term investors.