By Lynne Olver
TORONTO (Reuters) - Independent investment dealer GMP
Capital Trust
Some of the potential benefits to market participants include lower trading-execution costs and increased liquidity, Sullivan said.
Last week, six bank-owned investment dealers plus
independent dealer Canaccord Capital
GMP has been asked to join the group developing Alpha, but has not yet decided on a course, Sullivan told analysts on a conference call.
"We've certainly been verbally offered to be included in that new platform...we're assessing the entire landscape of what's happening in Canada before we make any decision," Sullivan said.
Aside from the proposed Alpha system, Instinet Inc. plans to launch an electronic Canadian trading system this year, and the privately owned Canadian Trading and Quotation System Inc. is in the late stages of testing its alternative system, called Pure Trading.
GMP Capital is looking at "several" systems in the marketplace and has not decided whether to invest in any of them, Sullivan said.
In the United States, alternative trading systems, or ATSs, have taken some market share away from established stock exchanges, and have provided increased liquidity to capital markets, he noted on the call.
"We think that all of these new platforms will do the same in Canada, (they) will serve to add increased liquidity to the Canadian marketplace, which ultimately will be good for us."
In addition, trade-execution costs should decline, but it is impossible to specify the potential impact on GMP's costs, he said. The firm paid about C$1.6 million in direct trading fees last year.
"Increased competition in the marketplace is ultimately going to lead to lower fees, we've seen the TSX respond over the last couple of years by lowering trading fees as these new exchanges have even been talked about," Sullivan said.
Earlier on Thursday, GMP said its first-quarter profit
climbed 15 percent, as revenue rose across its three business
lines and it benefited from gains on the sale of its Montreal
Exchange Inc.
GMP Capital said net income was C$44.5 million ($40 million) in the three months ended March 31, or 70 Canadian cents a unit. That is up from C$38.6 million, or 65 Canadian cents a unit, in the year-earlier period.
Overall revenue hit a quarterly record of C$114.7 million, up 18 percent. But expenses grew by 22 percent to C$66 million due to increased staffing and associated compensation costs.
In its capital markets unit, the largest of GMP's three business lines, revenue rose 8 percent, while expenses dipped 1.5 percent. Capital markets revenue included C$12.8 million in one-time gains from its Montreal Exchange shares. The Montreal-based derivatives exchange went public during the first quarter.
($1=$1.11 Canadian)
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