Omega ATS, Canada's low-cost, low-latency alternative trading system for equities and fixed income instruments, today announced the introduction of a new inverted pricing model, effective November 1, 2011.
The new pricing schedule will eliminate the pass-through fee typically charged to investors who remove liquidity from the marketplace, making it the only free ATS for "active" equities participants. Investors under the new model benefit from more competitive fees on equities trades that are then executed on one of Canada's fastest matching engines.
Omega's new fee model moves away from the symmetrical pricing model offered by other trading venues in which both the participant adding liquidity as well as the one removing it are charged. Under Omega's new pricing schedule, only the investor adding liquidity pays a fee. Passively executed orders for trades on equities below $1.00 will be charged $0.0002 per share, and trades on equities at or above $1.00 will be charged $0.0006per share. This new model benefits, in particular, liquidity posters seeking a venue that provides better price/time priority over one that provides rebates as incentives.
Mike Bignell, president and CCO of Omega ATS, comments: "At Omega, we don't think it makes a lot of sense to charge participants on both sides of the market. If you are trying to reduce overall costs, why charge everyone that participates? Our new pricing model addresses this issue and reflects Omega's commitment to reducing and streamlining equities pricing while promoting increased liquidity in the marketplace."
Bignell continues: "Due to Omega's increase in absolute market share and its investment in innovative offerings, such as the facilitation of US securities trading in Canadian dollars, the trading venue we provide has increased in its importance and application. ATS's came about to challenge the marketplace and offer better alternatives to investors, such as innovative pricing- what's the point of continuing to operate if we aren't going to make the Canadian market a better place to trade by improving some of its processes?"
Omega ATS will not be altering the current pricing model for debt securities traded, and both listed and unlisted fixed income products pricing will remain the same. All fixed income products, including TSX-listed Debentures, will be charged on the "Active" side only at $0.05/$1000 face value, providing a competitive offering for both fixed income and equities trading on the ATS.