Chi-X Canada, an alternative trading platform for Toronto Stock Exchange-listed equities, will launch a price promotion for exchange-traded funds (ETFs) in September that will slash its taker fee.
From 14 September to 16 October, the charge for taking liquidity when trading ETFs will be cut to C$0.0020 from C$0.0029. Liquidity providers in ETFs will be charged the standard Chi-X Canada rebate of C$0.0025. The promotion, dubbed ETF X Factor, will apply to all ETFs available for trading on Chi-X Canada.
During the promotion, the taker fee will be lower than the maker rebate for trading ETFs, meaning the platform will effectively lose money for each trade. This practice, known as inverted pricing, is typically employed to boost liquidity and grab market share.
The new promotion follows a similar X Factor scheme that applied to all stocks traded on Chi-X Canada, which took place in March. During this promotion, liquidity providers were paid C$0.0033 and liquidity takers were charged C$0.0029.
“From our launch, a core tenet of Chi-X Canada has been our desire to pass along the benefits of competition to our participants,” said Beth Haines, manager of client relations for Chi-X Canada, in a statement. “Our March pricing promotion was a huge success both for the Canadian trading community and Chi-X Canada, and we’re excited to build on that by passing along the benefits of trading Canadian exchange-traded funds with the ‘ETF X Factor.’”
From 1 September, Chi-X Canada will also introduce a new general pricing schedule. The standard C$0.0025 maker rebate and C$0.0029 taker fee will remain unchanged, but the platform will introduce a C$0.0005 maker rebate and a C$0.0008 taker charge for stocks priced under C$1.