Chi-X Canada, an alternative trading system (ATS) for equities listed on the Toronto Stock Exchange (TSX), has added new destinations to its proprietary smart order router.
Clients are now able to access rival ATS Alpha Trading Systems and agency broker ITG’s MATCH Now non-displayed trading venue.
In Canada, brokers are expected to route orders to the trading venue with the best price under the Investment Industry Regulatory Organisation of Canada’s best price obligation. Chi-X Canada is currently the only ATS with its own internal SOR, which has been made available to clients since June 2008.
“For brokers, connecting to every single ATS is not easy, doesn’t always fit into technology plans and creates additional costs, which is not ideal, especially when they are not sure which ones will be successful,” Tal Cohen, CEO, Chi-X Canada, told theTRADEnews.com. “Clients can elect how to send us trades on an order-by-order basis, which we can then route to other venues accordingly.”
The connection to ITG’s MATCH Now was established for traders looking to take advantage of size and price discovery opportunities available from trading in the dark. Customers can choose to ping MATCH Now before moving on to other venues, or rest passive orders there.
“It’s important for us to be a place of initiation for our customers, so Chi-X is not just a market centre but a place to receive optimal execution,” added Cohen.
Chi-X Canada also reported an increase in overall market share following its inverted X Factor price promotion. The month-long scheme rebated liquidity providers at $0.0033 per share and charged takers of liquidity at $0.0028 (increased to $0.0029 for participants who execute less than 20 million shares per month). Chi-X Canada’s share of traded volume in Canada rose to 2.83% in March from between 1% and 1.5% in February.
According to the firm, average daily volume in the week of March 30, when the rebates returned to the normal level of $0.0025, was 16.7 million shares – unchanged from the level during the promotion.
“We ran the pricing promotion to try and get people familiar with Chi-X’s offering,” said Cohen. “This was not only to attract domestic clients but also international clients, and this seems to have worked as liquidity has stuck.”