Canadian alternative trading system (ATS) Omega ATS is to offer subscribers trading in US securities, quoted in Canadian dollars, from 1 April 2011.
Firms will be able to enter bid/ask prices directly in Canadian dollars on the US securities live on the venue. The first tranche of securities will include popular US stocks such as Bank of America, Google, Microsoft and several exchange traded funds.
“Bringing US securities onto the venue shines some much-needed light on an area of the market that has traditionally been characterised by OTC deals,” said Mike Bignell, president, Omega ATS. “It's a big part of our mission to increase transparency and eliminate foreign exchange premiums – which can be as high as 3%.”
He added that the cost of having to maintain two different brokerage accounts to participate in US exchange traded securities had been burdensome to retail investors, while its removal would help the creation of a more efficient marketplace. “We're trying to make these products more obtainable for the Canadian investor,” he said.
The ATS expects to expand the range of foreign instruments available for trading to include any credit default swap-eligible securities traded on a “highly trafficked” US exchange.
Omega ATS increased its trade volumes by over 750% during 2010. Bignell claims that the company has been averaging over 20 million shares a day in stock trading since late February. “Canada is seen as a safe haven to invest,” he said. “We're seeing people coming to market from all over the world.”
According to data provided by Thomson Reuters, Omega ATS had around 0.1% of daily equity market share in Canada, as of 14 March 2011.