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

Thu Nov 12, 2015 12:41pm EST
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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 month.

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 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.   Continued...