The proposed new alternative trading system, Alpha ATS, has received certain regulatory relief.

The decision, reported in Friday’s OSC Bulletin, indicates that it has received relief from the requirement to be recognized as a “stock exchange”, and relief from the requirement that it give regulators six months notice of plans to introduce a two-sided market.

According to the decision, Alpha may not fall within the definition of “alternative trading system” under existing securities rules because it will be offering an “odd lot facility”, and as a result may be providing directly or through its subscribers, a guarantee of a two-sided market.

The regulators granted relief, provided that Alpha complies with, and is subject to, the ATS Rules as if it is an ATS, except that it is not required to comply with the rule relating to advance notice of providing guarantees of a two-sided market. Also, if it intends to carry on stock exchange activities it must notify the securities regulatory authorities within the required timeframe. And, if it meets certain trading volume thresholds it must also notify the regulators.

Earlier this year, the firm was registered as an investment dealer, and it was approved as a member of the Investment Industry Regulatory Organization of Canada. It was supposed to launch trading on September 26, but that launch has been delayed.

IE