The largest bank in Canada, working with the most influential fund managers are planning to establish a new stock exchange to go up against the market dominant TMX Group Ltd. This move is also aimed to curtail the reach of high frequency trading companies that recently have been marred with controversy.

The new exchange would be operated by Aequitas Innovations Inc and is backed by the Royal Bank of Canada as well as institutions that were not part of the 2012 TMX takeover, who currently operates Toronto Stock Exchange.

The operator and founders are planning to start operations by the last quarter of 2014. The exchange would focus on retail and institutional investors that felt they were victimized by the highly questionable practices of high frequency traders.

High frequency traders utilize sophisticated algorithms that trade thousands of shares in no more than a millisecond seeking to make profits from price imbalances and market changes. Many fund managers have called out these practices and their effects on the market activity.

According Aequitas CEO Joe Schmitt, "I would call it a grassroots reaction from key market stakeholders saying we need choice, more choice in the marketplace."