The Canadian Securities Administrators (CSA), the council of securities regulators for Canada’s provinces and territories, has announced that the Toronto Stock Exchange (TSX) will act as a central, consolidated source for the country’s equity market data for five years, starting 1 July.
In its role as an ‘information processor’, TSX will provide three services: a consolidated data feed, providing access to pre- and post-trade market data from each contributing marketplace; a consolidated last sale, providing consolidated real-time last sale data from all contributing marketplaces; and a Canadian best bid and offer (CBBO) for all equity securities. Both the consolidated data feed and CBBO are already available.
The service will consolidate data from the TSX itself, the TSX Venture Exchange growth market and the displayed alternative trading systems (ATSs) for equities operating in the market: Chi-X Canada, Pure Trading, Alpha Trading and Omega ATS. Non-displayed ATSs TriAct MATCH Now and Liquidnet will be part of the consolidated data feed and consolidated last sale – when launched – but not the CBBO.
“In today’s multiple marketplace environment, data consolidation is important for both marketplace participants and investors,” said Jean St-Gelais, CSA chair and president of Autorité des marchés financiers, in a statement. “An information processor would ensure that they have access to information from all of the marketplaces.”
While TSX will be responsible for disseminating competitors’ data, the exchange will take a number of steps to address potential conflicts of interest. A governance committee for the service will be established, and procedures will be put in place to ensure that TSX staff not involved in operating the facility do not have knowledge of, or access to, competitor data or client information. In addition, agreements between TSX and contributing markets will contain terms preventing the exchange from manipulating data, and third-party technology will be use to consolidate the data.
Market participants will continue to pay the current fees charged by each marketplace for data obtained through the TMX service.
In July 2006, the CSA invited any interested party to apply to become an information processor for exchange-traded securities. Three firms, TSX, Bourse de Montréal (MX) and CDS Inc, the securities information division of Canada’s central securities depository, applied, but MX and CDS withdrew their applications.