NEO Exchange head reveals growth plans

After signing a deal with BMO InvestorLine, President and CEO of the NEO exchange Jos Schmitt explains what’s in store for Canada’s newest exchange

The CEO of Canada’s newest exchange has outlined his expansion plans throughout the remainder of 2016. Launched in March this year, the Aequitas NEO Exchange currently has one listing – Invesco Canada’s PowerShares DWA Global Momentum Index ETF – but will be increasing its offerings in the months ahead.

This week the exchange made another significant step in its progression with the announcement of its partnership with BMO InvestorLine. The agreement means that investors can avail of real-time quotes and direct online trading access to NEO-listed securities using the InvestorLine platform.

President and CEO of the NEO exchange Jos Schmitt outlined the importance of the tie-in with one of Canada’s Big Five.  “It’s an important milestone,” he says. “It’s the first bank that is fully supporting our listings on a discount brokerage platform. It makes our listed products available in an easy and straightforward way to investors. I now hope BMO’s competitors will emulate this and go in the same direction.”

As to further listings being added to the exchange, Schmitt explains that the process is in its advanced stages and should be completed before too long.

“We now have clear visibility that more listings will be added over the next few months,” he says.  “We have had a number of confirmations on some new ETFs and that will be announced soon. Exchange-traded funds will be a big component of our business.”

While the NEO’s first listing was an exchange-traded fund and the upcoming additions will also be ETFs, that’s not to say the exchange is pigeonholing itself. Its CEO explains his hopes for the exchange going forward, explaining that patience is needed when considering deals of this complexity.

“We continue to be a big believer in corporate listings,” he says. “The key thing will be getting that first one, then allowing time for people for observe and see if everything works well. We are convinced we can offer better service, better liquidity and better exposure.”

He adds: “Like with other exchanges, the listing process is complex. The BATS exchange in the US had its first listing in January of 2012 if memory serves me right and the second and third listings where not until December. That’s 11 months of a gap – we hope we are faster than that but it does take time.”

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