What Happened to "The Stock Market?"
In the beginning, the core purpose of the stock market was simple:
Create a market where investors can build wealth through their investments, while helping companies raise the capital they need to grow.
Investors had a level playing field and companies benefitted from a reliable price formation process. It was win-win. And together, these simple ideals drove our economy, created jobs, and supported growth and progress.
The Stock Exchanges Became the Money-Makers
The focus on these two aspirations was so straightforward, it seemed like the stock market must be something that belonged to all of us.
But many stock exchanges have become publicly-traded companies themselves. They belong to shareholders. And just like any other company, they are designed to turn a profit.
Decisions made to improve profitability can compromise decisions that should be made in the public interest. Over the past few decades, stock exchanges have made more and more decisions designed to improve their business results at the expense of supporting long-term investors and public companies. In this quest for profit, they enabled predatory trading practices which have changed the nature of capital markets around the world, creating a disadvantage for long-term investors, and removing millions of dollars in equity from the markets every day.
What Drives Them. What Drives Us.
At NEO, we believe an innovative re-focus on the fundamental values of a stock exchange can reverse the disruptive effects of predatory trading behaviour, and give companies, dealers and investors access to a stronger, fairer and more transparent stock exchange.
Here’s where you’ll see the difference:
Predatory high-frequency trading is good for the stock exchange business.
Predatory HFTs generate significant trading fees for exchanges and other marketplaces through their sheer volume, and will gladly pay fees for additional trading advantages, including co-located trading technology and access to faster market data.
A better trading experience is better for investors.
Our trading solutions are designed to level the playing field for long-term investors without a technological speed advantage, giving them the ability to participate in the markets without being continuously outpaced.
High market data fees are good for the stock market business.
They generate a steady income stream for exchanges and other marketplaces from a growing number of participants who depend on the latest market data to drive their trading strategies and decisions.
Better value is better for investors and traders.
We provide free real-time market data for all NEO-listed securities, as well as free or low-cost real-time data of all TSX/TSX-V-listed securities traded on NEO. That gives everyone the opportunity to see a more complete view of the market, and make better-informed trading decisions.
Additional listings are good for the stock exchange business.
Companies pay generous listing fees to stock exchanges, regardless of the level of service provided to them, and regardless of whether or not their listed securities trade successfully or enable efficient raising of capital.
Better service is better for public companies.
We help companies succeed and improve investor confidence with a market making program that works to enhance liquidity, and a visibility program that helps reach the broadest possible audience. We also reduce the overall costs of being a public company with substantially lower initial, annual and transactional fees while offering added value for your money. Our exception customer services ensures you value our partnership.
Protecting the status quo is good for the stock exchange business.
A lack of competition among stock exchanges leads to stagnation and resistance to change. Monopolistic stock exchanges that fail to develop solutions to problems that plague their stakeholders.
Continuous innovation is better for all of us.
We continue to develop new, innovative solutions that help drive more efficient and affordable markets. The use of different order matching models, the randomized “speed bump” to slow down predatory HFTs and anonymized public market data are just a few bold new ideas we brought to Canadian capital markets where the incumbent exchange failed to take action.