OSC Staff Notice and Request for Comment on Proposed Trading Structure

OSC Staff Notice and Request for Comment on Proposed Trading Structure


On August 13, 2013, the Ontario Securities Commission Staff (OSC) published, for a 45 days public comment period, a description of the trading features that are part of the trading ecosystem that we propose to implement as part of our mission to build a new exchange in Canada. The comment period will end on Friday September 27th 2013. We commend the OSC for this initiative as it complements our approach of dialogue with industry stakeholders.

The trading features identified by the OSC Staff, while a subset of the proposition that we intend to bring to the marketplace, are an intrinsic part of our integrated trading solutions seeking to restrict predatory trading and promote liquidity through committed and sustainable market making.

OSC Staff Notice and Request for Comment can be found here.

A short description of Aequitas’ point of view can be found here.

Taking Actions

Our initiative is a unique opportunity for all stakeholders in the industry to participate in building our marketplace of tomorrow. For us, it is all about re-establishing a fair balance among the various stakeholders and promoting quality markets.

Making your voice heard is important. You can do this in multiple ways:

Send in your own comment letter to the OSC;
Provide responses to our multiple choice questionnaire and send it to the OSC;
Sign the Aequitas Letter of Support, which we will send to the OSC with all of the signatories identified.

Macquarie launches Hong Kong dark pool

Macquarie launches Hong Kong dark pool


Macquarie Securities is opening a new Hong Kong dark pool this month.

After receiving its Type 7 license in July from Hong Kong’s regulator, the Securities and Futures Commission (SFC), Macquarie ran a pilot scheme with a select handful of accounts and is now offering the product to a wider range of clients.

The dark pool has been christened ‘MaX’, a diminutive of the term ‘Macquarie Crossing’.

The pool will prioritise agency-to-agency crossing. Within existing Hong Kong dark pools such a prioritisation had not been a requirement. In general, only professional investors bearing the SFC’s ‘Type A’ category are allowed to participate in ‘MaX’.

In addition, clients need to provide documented permission before their trades are allowed entry into ‘MaX’. In the past, trades might be placed into a dark pool simply under standard best execution arrangements.

It remains to be seen if the dark pools that have already been in operation in Hong Kong will need to adjust to the terms that have been applied uniformly to the new licensees and also to what extent the planned SFC consultation on the subject of dark pools may further impact the industry later this year.

SunGard provides Fox River algos to Silexx EMS

SunGard provides Fox River algos to Silexx EMS


SunGard’s Fox River Execution solutions algorithms now available on Silexx’s Obsidian platform

SunGard’s Fox River Execution Solutions has made its algorithms available to users of Silexx’s Obsidian execution management system (EMS). By providing Silexx customers access to Fox River’s entire algorithm suite, professional traders and risk managers using Silexx will now have the tools to help improve execution quality, as well as provide Fox River customers with the ability to access the Silexx EMS.

“SunGard’s Fox River algorithms will help provide Silexx traders and risk managers with improved fill trade rates and best price and execution. In addition, Silexx can offer customers a cost-effective, front-end gateway to Fox River algorithms.” – Thomas Frey, president, Silexx Financial Systems

“The availability of Fox River’s algos on the Silexx platform will help traders leverage innovation to achieve growth targets by reducing trading cost and risk while increasing execution performance.” – Bob Santella, president, SunGard’s brokerage business

Silexx’s Obsidian platform provides the ability to dynamically generate an interface for all of Fox River’s algorithm parameters, giving users the ability to integrate their algorithms on the Obsidian platform and control the parameters of every algorithm

UBS dark pool launches in Spain, the UBS MTF


Anish Puaar

02 Jul 2013http://www.efinancialnews.com/story/2013-07-02/ubs-dark-pool-launches-in-spain?omref=email_TradingTechnology

UBS dark pool launches in SpainUBS MTF, one of Europe’s largest broker-run dark pools, will start offering Spanish equities from Wednesday, as alternative markets continue to capitalise on reforms that have helped challenge the dominance of Spain‘s domestic stock exchange.

UBS dark pool launches in Spain

The alternative venue owned by the Swiss bank allows its members to match orders anonymously in European stocks and will join eight other so-called dark pools in offering trading in Spanish equities from July 3. According to data from Thomson Reuters Equity Market Share Reporter, UBS MTF traded €7.72bn-worth of European equities last month.

The addition of Spanish stocks to UBS MTF comes as dark pools and displayed alternative trading platforms, including Bats Chi-X Europe and London Stock Exchange-owned Turquoise, have finally made inroads into the Spanish market.

Bolsas y Mercados Españoles, Spain’s national stock exchange, has seen its share of equity trading fall from 92.5% at the start of the year to 80.21% at the end of June, according to the Thomson Reuters data. The dark pools analysed by Thomson Reuters accounted for 2.6% of overall trading in Spanish stocks last month, compared to 1.2% in February. Dark trading represented 4.4% of overall trading in EU-listed equities June.

Competition among trading platforms in Spain had been limited because of a reluctance from Spanish regulators to fully adopt EU-wide trading rules in the 2007 Markets in Financial Instruments Directive. The directive allowed equity trading to occur away from national stock exchanges for the first time, leading to a proliferation of alternative platforms that have gradually siphoned trading away from the domestic bourses.


But the new venues struggled to gain traction in Spain, mainly because of the high costs associated with the domestic clearing and settlement infrastructure, which is owned by the BME.

Richard Semark, CEO of UBS MTF, told Financial News, the introduction of his dark pool in Spain was due to increased demand for trading on alternative venues as evidenced by the recent market share surge.

“It’s taken a bit longer for Spain to open up to alternative markets, largely because of complications with the post-trade process, but changes to local rules mean these challenges are being solved. Settlement in Spain is still a more laborious and expensive process but we are now able to offer trading in the country in a way that is cost effective for our members,” he said.

The BME declined to comment.

 The growing share of alternative platforms in Spain means its equity market is finally beginning to bear a greater resemblance to other EU markets that have fully adopted Mifid.

In Germany, for example, 63.2% of share trading was conducted on Deutsche Borse last month, while the London Stock Exchange had a 51.86% share of trading in UK stocks in June.

More recently, alternative venues in Spain have also benefited from the end of a short selling ban in the country on January 31. The ban was introduced in July 2012 in a bid to restrict speculative trading activity but also curbed the ability of marketmakers to provide short-term liquidity.

Short selling – the practice of borrowing shares, selling them and then buying them back at a lower price in the future – allows marketmakers to manage the risk they take on from supplying continuous bid and offer quotes to the venues they operate on. Such firms make up the majority of trading activity on many alternative venues.

BM&FBOVESPA accepted Chi-X Global’s Chi-FX platform for commercial use, opening up the Brazilian market to institutional investors outside of Brazil.

BM&FBOVESPA accepted Chi-X Global’s Chi-FX platform for commercial use, opening up the Brazilian market to institutional investors outside of Brazil.


Chi-X described the news as a major milestone for the Chi-FX platform.

New York – Chi-X Global Holdings said BM&FBOVESPA S.A., Bolsa de Valores, Mercadorias e Futuros had accepted its Chi-FX platform for commercial use.

The company said Chi-FX powers the Brazilian group’s BEI (Brazil Easy Investing), which will allow registered Brazilian brokers to provide retail and institutional investors based outside of Brazil quotes of Brazilian exchange-listed stocks in their local currency.

By leveraging the Chi-FX technology, BEI integrates market data from BM&FBOVESPA stock quotes with FX rates offered by Brazilian banks.

“This is a major milestone for our Chi-FX platform” said Tal Cohen, CEO of Chi-X Global. “Brazilian market participants will be able to offer their off-shore clients an automated solution for trading Brazilian equities with embedded FX rates, thereby reducing latency, broadening access and minimizing currency risk for international investors. This is an exciting time for Chi-FX and we will be exploring new opportunities to expand the platform throughout Latin America.”

Cicero Vieira Neto, COO of BM&FBOVESPA, said: “We are looking forward to the launch of BEI, which coupled with the recent changes to the CPF registration process, will represent a significant step in the ongoing development



Who is behind the new Canadian Aequitas Innovations Exchange proposing to take on the TSX?

Who is behind the new Canadian Aequitas Exchange proposing to take on the TSX?


Aequitas Exchange is a proposed stock exchange to challenge the Toronto Stock Exchange. Ther is

Aequitas is a joint venture between several domestic and international financial services companies:

The new exchange is offering lower fees and fairness of smaller investors

A recent article provides more detail;


In a direct jab at the Toronto Stock Exchange, RBC, Barclays and others are creating a new exchange that does not permit any high-frequency trading. Will it work

Canada’s dominant stock exchange operator – the TMX Group – has some new competition with a twist. The Royal Bank of Canada, Barclays and Investment Technology Group (ITG) and others have joined forces to form Aequitas Innovations, a new stock exchange that will limit the role of high frequency trading.

Slated to start trading in 2014, the Aequitas exchange aims to be a refuge for investors who have been short-changed by the high frequency traders, according to managers behind the new venture.

“I would call it a grassroots reaction from some key market stakeholders saying we need choice, more choice in the marketplace,” says Jos Schmitt, chief executive officer of Aequitas. According to news reports, Schmitt previously ran Alpha Group before it was taken over by TMX Group, which runs the Toronto Stock Exchange. TMX handles an estimated 80 percent of equity trading in Canada.

“Through Aequitas, we have a compelling opportunity to create a level playing field for both retail and institutional investors by challenging certain predatory high frequency trading strategies which have impacted the quality of existing equity markets,” says Greg Mills, chairman of Aequitas, and co-head, global equities, RBC Capital Markets.

Canadian mutual fund managers CI Financial Corp and IGM Financial Inc, pension fund PSP Public Markets are also behind the new exchange.

So why eschew HFT now? What is the allure of a go-slow exchange? HFT has been the punching bag for several critics of high-speed trading. While HFT firms and traders claim that they create much needed liquidity, critics charge that their practices create nothing more than market volatility and unneeded fear for ordinary investors. Also, more and more government regulators are looking at HFT and its impact on the market. While the outrage might be as loud as it was in the days after the collapse of Lehman Brothers and Bear Stearns, the steady drumbeat against HFT has not quieted down. Clearly some regulations in the US markets are forthcoming.

Why Canada? Because of the country’s stellar standing after the credit collapse of 2008 thanks to its tight risk rules, an exchange that bars the door to HFT might win favors with lawmakers and auditors. Canadian firms have a different definition of risk compared to the cowboys in the US so the idea of an easy-trading oasis might be what investors – those who want to trade at normal levels – ordered.

It will be interesting to see how TMX responds. Perhaps they will counter with even faster feeds and trading rates.

After all, human beings love speed





CHI-X Canada ATS CX2 successfully completes launch and captures up to 6% market share in key names

CHI-X Canada ATS CX2 successfully completes launch and captures up to 6% market share in key names


Published on   May 29, 2013

Chi-X® Canada ATS Limited, a wholly owned subsidiary of alternative trading venue operator Chi-X® Global Holdings LLC, announced that CX2™ successfully completed its symbol migration of all TSX-listed and TSXV-listed securities on May 21, 2013.

Dan Kessous, CEO, Chi-X Canada commented “We are excited to see our clients reacting to CX2 pricing and features. CX2’s immediate success demonstrates that retail and institutional investors are benefiting from CX2’s unique pricing that rewards liquidity takers and that CX2 is key to reducing the overall cost of trading for investors in Canada.”

Kessous continued “It has been an exciting year for Chi-X Canada. The trading community continues to push our market share to new record highs. We are pleased to report that Chi-X Canada was the only venue to gain market share on a year over year basis in April, rising from 10% to 15% for TSX-listed securities. We remain committed to working with our clients to develop products and services that make trading more efficient.”

Chi-X Canada
“We would like to thank the following vendors for their support and readiness: Fidessa Canada, IRESS Canada, Pico Quantitative Trading, Stockwatch and ThomsonReuters. We look forward to welcoming new vendors over the coming weeks.”

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