09.01.2011
By Terry Flanagan

CNSX Eyes Maple-TMX

As the TMX Group-Maple Group deal awaits regulatory approval, competitors in the Canadian trading landscape are monitoring the situation and preparing accordingly, as the transaction stands to hold implications for all market participants. One development might be some TMX order flow coming up for grabs.

“We expect if (the TMX-Maple deal) goes through, there will be number of changes to the market landscape,” said Richard Carleton, interim chief executive of CNSX.

One of the biggest question marks surrounding the deal has been the future of the Alpha Group alternative trading system, which is owned by members of Maple Group. According to Carleton, Pure Trading is being positioned to capture a piece of the market share currently held by Alpha.

“We are positioning ourselves from a pricing and features standpoint to garner some of that share,” Carleton told Markets Media. “There’s a big opportunity there, Alpha has managed to win somewhere north of 20 percent market share in TSX stocks. I don’t think the kind of support Alpha owners have provided to Alpha will continue if and when Maple is in a control position in TSX.”

“Twenty percent of the business is not available to us now, and not available to Chi-X, Omega ATS, or TSX. It will be available after the transaction is completed,” Carleton continued. “We’re keenly focused on being in the best position to win as much as we can.”

Carleton assumed the role of CEO after Ian Bandeen stepped down in June. Since taking over, Carleton has kept the ship steady and has continued to execute the company’s strategic plan.

“We’re certainly continuing on the same trajectory for both businesses, Pure Trading and the Canadian National Stock Exchange,” said Carleton. With that said, Carleton notes that the company’s mantra is to continually seek improvements and enhancements to its products and services. The CNSX is expected to launch a new trading infrastructure by the end of September, and Pure Trading has recently extended its trading hours by an hour, as per customer demand.

”Following overnight news, people were prepared to make markets on the stocks involved,” said Carleton, noting the increasing volume of block trading. “We wanted to be able to do it at 8 a.m. from the previous 9 a.m.”

Prior to his appointment as interim CEO of CNSX, Carleton had been responsible for the development and operation of the company’s Pure Trading alternative trading system. Bandeen, a founder of CNSX, had been in the role of CEO since late 2005, and remains in an advisory role. Carleton asserts that the search for a new CEO is still ongoing, with no timetable for when a decision will be made. At the time of the change, Carleton was named as one of the leading candidates for a permanent replacement.

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