The growth of alternative trading systems is eating into the market share of traditional Canadian stock exchanges, but it may be a little early to sound the death knell of the TMX Group.
The combined value of trades placed on the Toronto Stock Exchange and the TSX Venture Exchange fell from 68.6% in Q2 2010, to 64.9% in Q1 2011; trading volumes declined from 72.5% to 68.8%, according to data compiled by IIROC.
Omega ATS quickly staked its claim as the fastest growing trading platform with a 3,000% increase in trading values since Q2 2010, from $142.5 million to $4.42 billion, and volume growth from 30.6 million shares to 547.7 million
“The past twelve months have been incredibly successful for Omega as our growth trajectory demonstrates. We outpaced every one of our competitors significantly in 2010 and our last quarter’s growth rates suggest that this upward path is set to continue,” said Mike Bignell, president, Omega.
Omega’s boast of posting the fastest growth needs to be put into perspective. The biggest threat to the traditional exchanges is by far Alpha, which accounted for 18.6% of value traded in Q1 2011, and 19.7% of volume.
Omega accounted for 1.6% of value traded in Q1 2011, and 1.5% of volumes, ranking it below both Chi-X and Pure Trading.
But Bignell says momentum is on the side of his platform.
“The obvious challenges now lie with the TSX, which is seeing newer, more nimble trading venues like Omega chip away at their position in the marketplace and the other ATS’s, who have failed to innovate as Omega has with new instruments and a more affordable fee structure.”
For background on ATS growth in Canada, read: