Canadian stock exchange group TMX Group has revised its fee schedule for equity trading and introduced a new Electronic Liquidity Provider (ELP) incentive programme for the Toronto Stock Exchange (TSX).
The changes are intended to enhance trading activity and liquidity on TSX and TSX Venture Exchange, and provide cost savings for all marketplace participants.
"As Canada's primary source of liquidity for equities, we are focused on providing the trading community with a highly efficient marketplace characterised by competitive fees, high performance technology, and ease of access to our marketplace," said Kevan Cowan, president, markets and group head of equities, TSX.
Changes to the equity trading fee schedule are a continuation of TMX Group's ongoing efforts to incentivise liquidity providers and reduce the overall cost of trading Canadian equities. The fee schedule changes, effective 1 January 2009, will increase liquidity-providing credits for all market participants and reduce the spread between the active fee and passive credit for 90% of market participants.
Registered market makers, including Exchange Traded Fund (ETF) market makers, will also benefit from a guaranteed $0 fee cap per trader and increased liquidity-providing credits. In addition, revised pricing models for ETF trading, specialty priced crosses, and must-be filled trades are now based on customer feedback and will promote trading growth in these areas.
Based on historical trading activity, patterns and product mix, changes to the trading fee structure could reduce trading fees by approximately $11 to $14 million on an annual basis if offsetting benefits, including increased volumes, are not realised. However, actual trading fees will depend on future trading activity, patterns and product mix.
Furthermore, TMX’s ELP program offers aggressive fee incentives to experienced high-frequency traders using proprietary capital and passive electronic strategies on the TSX Central Limit Order Book.
"TSX is committed to retaining its position as the central point of price discovery in Canada," said Robert Fotheringham, senior vice president, trading, TSX. "We are confident that the participation of ELPs will benefit investors, traders, and issuers alike by tightening spreads, reducing friction costs and increasing overall turnover. We also look forward to attracting significant liquidity from outside of Canada and to further entrenching TSX's role as a global market centre."