(Adds CEO comments, financing details)
By Euan Rocha
TORONTO, March 12 (Reuters) - Aequitas Innovations Inc said on Thursday it has completed a “significantly oversubscribed” round of funding, raising about C$30 million ($23.6 million) and broadening its shareholder base ahead of the launch of its Neo exchange this month.
The Toronto-based firm said indications of interest from both founding shareholders and new shareholders represented close to 150 percent of the amount Aequitas originally planned to raise. It said the offering was distributed to ensure a fair representation of all market participants and stakeholders.
Aequitas - a Latin term denoting fairness and the origin of the English word equity - is already backed by Royal Bank of Canada, Barclays PLC, pension funds OMERS and PSP, mutual fund managers CI Financial Corp and IGM Financial Inc, and Investment Technology Group Inc , among others.
Aequitas’ Neo platform will offer trading and listings as it looks to challenge TMX Group Inc’s dominant Toronto Stock Exchange and its TSX Venture and Alpha platforms, along with rivals like Chi-X and CX2.
“It’s great to see that we have investors that oversubscribed on the amount that we sought to raise as that is clearly a major endorsement for us,” said Aequitas Chief Executive Jos Schmitt.
Aequitas’ new shareholders represent both investors and capital-raising companies, including Canadian pension fund manager British Columbia Investment Management Corporation (bcIMC), fund managers Davis Rea and Invesco Canada Ltd, and Chicago-based private equity firm Vernon & Park Capital L.P.
It said new shareholders representing the dealer community include Jones Gable & Co, Maison Placements Canada Inc and, BBS Securities Inc.
Other prominent investors include Don Ross, chair of Jones Gable & Co; Vincent Chahley, a former executive at Tristone Capital Ltd; and Perry Dellelce, founder and managing partner at Toronto-based law firm Wildeboer Dellelce LLP, among others.
The Aequitas model, which also includes plans for a private marketplace to fund early-stage companies, will attempt to limit controversial high-frequency trading strategies by implementing extra costs and speed bumps for them.
High-frequency traders use sophisticated algorithms to trade shares in milliseconds. They make it easier for investors to trade by stepping in and taking the other sides of many orders and profiting off of trading spreads.
Scrutiny around high-frequency trading intensified following last year’s release of Michael Lewis’ book, “Flash Boys: A Wall Street Revolt.” In the book, Lewis contends high-frequency traders have rigged the market, profiting from speeds unavailable to others. (Reporting by Euan Rocha; Editing by Alan Crosby)