Goldman Sachs to launch stock market in Canada
SIGMA-X will be 'dark pool' market for anonymous trading
Another new stock market is set to debut in Canada, this time in the hands of New York investment bank Goldman Sachs.
The Wall Street firm said Thursday that it will bring its stock market system, SIGMA X, to Canada at an unspecified date.
The SIGMA system is what's known as a "dark pool" market one that would allow investors to anonymously buy and sell stocks on the Toronto Stock Exchange.
The stock market will be financed by numerous investors in addition to Goldman, including brokers, hedge funds and institutions, it said.
What is a dark pool?
The term is used to describe an alternative stock trading platform generally reserved for institutional investors, and not available to the public. They allow stocks to be traded anonymously, during all hours of the day. Their main appeal for institutional investors is to let them buy or sell large amounts of shares without affecting the price on the public market. The anonymity also keeps those actions secret from competitors.
"The growth potential of the Canadian equity market is significant," said Todd Lopez, managing director and co-head of Americas sales, Goldman Sachs Electronic Trading.
"We believe unique, alternative pools of liquidity will continue to play an important role in the Canadian market's development."
The move comes as competition in the stock market space intensifies.
TMX Group, operator of Canada's major exchanges, including the TSX, is in the middle of a hostile takeover bid for the company.
The bidder, Maple Group Acquisition Corp., which groups a number of financial institutions and pension funds, is giving investors until the end of September to decide whether they want to tender their shares under the $3.8-billion offer.
The potential acquisition of TMX would merge it with Maple's market operations, combing the country's two biggest competitors and raising concerns among some about concentration.
Goldman said in a release that its trading system would "provide a broad source of Canadian equity liquidity."
The SIGMA X system would be the 11th stock market to operate in Canada.