Alternative-trading system operator Omega Securities has more than doubled its share of the Canadian equities market this year, according to ATS officials.
The trading venue began the year with a little under 2% market share and ended the third quarter with almost 5%, Omega Chief Executive Officer Sean Debotte said.
He attributes th organic growth to aggressive inverted rebate pricing, path-through fees and market data licensing, as well as sizable resting liquidity on the venue.
“About 85% of the orders resting on our order book could be considered ‘long-life’ orders that rest for a second or more,” explained Debotte. “Our liquidity providers are not the ultra-high speed traders that you may find in other books.”
At the end of the third quarter, Omega also introduced broker preferencing to its ATS, which allows traders to cross their own trades. “It’s a mainstay in the Canadian equities ecosystem,” he noted. “Canadian market regulations do not permit brokers to internalize their trades. This gives them a method of internalizing their flow on a protected and lit market, which is allowed.”
For brokers executing broker-preferred trades on the ATS, Omega use a symmetrical pricing model instead of its regular inverted pricing schedule.
“Instead of one side paying the passive fee and active side receiving its removing-liquidity rebate, we charge both sides equally - one mil per side,” said Debotte. “That represents about 60% of the spread”
Since its launch of the new capability, the ATS has gain traction with a number of smaller institutional traders looking to internalize their trades as well as interact with the steady retail order flow that is attracted by Omega’s inverted pricing, he added.
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