Canadian exchange group TMX has received regulatory approval to launch its own alternative trading system, TMX Select, which is aimed at high-frequency traders. The platform is due to launch on 11 July.
TMX Select's pricing model charges both liquidity seekers and liquidity providers the same nominal fee, a structure which it says is designed to offer savings to liquidity takers. TMX Select charges both sides of a trade C$0.0002 per share for stocks priced at C$1 and over and C$0.0001 per share for stocks priced under C$1.
The platform will have a simplified market structure with continuous trading of board lots only, no special terms such as rebates, a strict price-time priority for all orders and expanded trading hours, from 08.00 to 17.00; in addition, it will operate without market makers.
This pricing model is different from the standard maker-taker model currently maintained by several Canadian marketplaces, such as the Toronto Stock Exchange, owned by TMX Group, and Chi-X Canada.
“The TMX pricing model equally recognises the importance and value of both types of participants to the marketplace – the one that displays liquidity and is willing to wait and the participant that is willing to transact immediately,” said Gary Knight, vice president, trading, TSX Markets and CEO of TMX Select.
Testing on TMX Select has been available since 1 April 2011 in the TMX testing environment.
TMX is currently engaged in a merger agreement with the London Stock Exchange Group. The deal moved a step closer to completion last week, when the Canadian Commissioner of Competition granted approval to the transaction.