Canadian alternative trading system Alpha Group has delayed the launch of its new dark trading facility until February 2011, following a request by regulator the Investment Industry Regulatory Organization of Canada (IIROC).
IIROC has asked that a freeze be applied to all market participants’ projects where changes could have an impact on regulatory data feeds and the marketplaces that send them.
Alpha Group’s dark venue had been due to launch at the end of November 2010, offering buy- and sell-side firms the ability to seek matches without pre-trade transparency and with guaranteed price improvement versus the national best bid and offer on rival lit exchanges. However a surveillance upgrade to IIROC's technology system has necessitated the freeze, which expires in February.
Jos Schmitt, CEO at Alpha Group, said the firm expects to launch its new dark offering in February, as soon as the freeze is lifted.
“All technological work is progressing well and we are now considering extending the testing period for our dark facility while we wait,” Schmitt told theTRADEnews.com, adding that the new platform would help retail investors by offering substantially lower cost pricing at a time when they faced pricing pressure due to the increase in maker-taker pricing systems on the main lit exchanges.
“If you trade on a dark facility, there always has to be an improvement versus the national best bid and offer. Any investors that trade there will always give their clients the best price available on the market, so it's a win-win situation,” he added.
According to data from the Fidessa Fragmentation Index, an analysis of on-order book trading, Alpha Group currently has an 18% market share of trading in Toronto-listed securities.