Alternative trading system, Alpha ATS LP, is planning to add a feature that would prevent inadvertent trades within the same brokerage house from being reported to the market.

According to today’s OSC Bulletin, the firm is seeking approval for Alpha Self Trade Management, “an optional designation that suppresses trades from the public feed where orders on both sides of the trade are from the same subscriber”, in the event of unintentional self trading.

“Subscribers will be able to enter orders with the assurance that if the order trades against another order of the same subscriber the trade will be suppressed from the public feed and will not cause any potential concerns created by the policy concerns regarding wash trades,” it says. “Suppressing these trades from the public feed prevents the false or misleading appearance of trading activity or interest in the purchase or sale of the security in question.”

The firm notes that similar designations are currently available on other markets in Canada. “Some marketplaces allow firms to prevent two orders from same firm from trading against each other based on unique trading keys defined by the firm. Another marketplace offers a similar marker so that a trade that has occurred between proprietary accounts of the same firm is not publicly reported,” it says. “The implementation of the Alpha Self Trade Designation was designed to address comments and requests made by its subscribers.”

Comments on the proposed change are due by August 30, and the firm plans to introduce the feature in the fourth quarter.

IE