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People walk on the sidewalk of Bay Street past the Toronto Stock Exchange building in Toronto on July 30, 2013.Gloria Nieto/The Globe and Mail

The proposed new Aequitas stock market for Canada is winning its share of support from investors and market users.

The Portfolio Management Association of Canada (PMAC), for example, which represents 170 firms running more than $800-billion of assets, is on side. So is Aston Hill Financial, which runs $7-billion. So is asset manager Davis-Rea Ltd. So is the Buy-Side Investment Management Association of Canada [BIMA], which represents about three dozen large money managers.

The support shows up in the comment letters (they can be found here) that were solicited by the Ontario Securities Commission, which has to decide whether it is going to bend some long-standing and pretty important rules to allow Aequitas. The new exchange wants to be allowed to operate in a manner that tries to exclude some high frequency trading strategies, and to compete in a market dominated by TMX Group Inc.'s exchanges.

The balance of the letters is in favour of Aequitas, though there are certainly concerns raised. (That's after excluding those from Aequitas shareholders, major shareholders of TMX Group after the Maple Group takeover, and rival market operators.) One major outlier is Connor, Clark & Lunn Investment Management, which agrees with some of the aims but questions the methods.

The OSC is clearly leery of some of the changes, as laid out in its request for comment. But investors are showing support for giving Aequitas a chance, judging by the responses filed with the OSC.

"PMAC supports the efforts of Aequitas to build a new stock exchange in Canada," the association said in its submission. "The Canadian capital markets need exchanges that protect the interest of all investors and reflect the fundamental purpose of the markets: the efficient allocation of capital between issuer and investor as a central force driving the Canadian economy."

PMAC goes on to say "We believe in the principles of using innovative technology and market structure design to promote liquidity, fairness, cost savings and economic growth. We are also proponents of competition in the marketplace to ensure a robust future for Canada's capital markets."

BIMA said the proposal comes with "benefits to the marketplace" and regulators must be flexible when dealing with concerns. "Such concerns should not, in our view, slow innovation and suppress change. The status quo is not the solution."

Davis-Rea wrote that TMX needs competition and there needs to be a way to end the "open season for gaming of investors on marketplaces." Given that, "in the absence of other meaningful and timely plans to restore balance, we think the Aequitas proposal has merit."

GMP Securities, one of the major independent brokerages in Canada, also came out in support.

"GMP applauds Aequitas for its innovation and supports the attempt to deal with serious market issues that have been studied for some time, yet we have seen little progress in terms of oversight and rule-making."

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