Toronto-based TMX Group Ltd. has received approval from the Ontario Securities Commission (OSC) for its “long life” order type on the Toronto Stock Exchange (TSX), the company announced on Wednesday.
Last fall, the TMX Group proposed a number of changes to its equity trading offerings, including the introduction of a new order type designed to enable traders to participate in the market without competing on speed.
Traders that use the new “long life” order types commit to a minimum resting time of one second in the order book, and the order cannot be modified or cancelled during that time. In exchange for committing to the one-second delay, these orders will receive allocation priority. If a cancel or order modification request is received before the minimum resting time has elapsed, that request will be queued by the system; and, once the minimum resting time has elapsed, the system will apply a random delay to a message to cancel or modify the order.
The new order type aims to enhance the quality of execution for long-term investors that aren’t speed sensitive, and their dealers, by rewarding traders that are willing to commit liquidity to the book for a minimum time, and by allowing them to trade without having to compete on speed, TMX Group says.
The introduction of the “long life” order type, which is planned for Nov. 16, is another milestone in a series of TMX initiatives to reshape Canada’s equities trading landscape, the company says.
The launch of Alpha’s previously-announced innovative trading model is on track for launch on Sept. 21, TMX Group notes. As well, in June 2015, the company implemented important changes to its equity trading fees designed to address long-standing concerns with the maker-taker fee model and deliver significant benefits to the market.
“This development marks the latest in a series of major steps we have taken this year to improve the trading experience for participants and increase efficiencies for all of our equity trading clients,” says Deana Djurdjevic, senior vice president, equities trading, TMX Group, in a statement. “We received a lot of valuable feedback on the long life order type from our clients and we are appreciative and encouraged by their support as we continue to roll out new features and initiatives to enhance the quality of our markets.”