Dark pool operator Liquidnet Canada Inc. is to start offering two new order types, which will allow dealers to enter orders on behalf of clients for the first time.
The Investment Industry Regulatory Organization of Canada (IIROC) published a notice Friday indicating that Liquidnet will begin accepting agency orders from IIROC participants at the start of trading on October 1.
To date, trading on the alternative trading system has been limited to institutional investors. It is now implementing two new order types that will allow dealers to enter client orders to trade with institutional orders at the mid-point of the national best bid and offer (NBBO).
In proposing the new order types earlier this year, the firm indicated that they will allow Liquidnet members “to interact with additional agency liquidity submitted by IIROC participants, with both achieving mid-point executions while minimizing market impact.”
IIROC also notes that rule changes concerning dark liquidity on Canadian marketplaces will take effect on October 15, and it reminds firms to, “ensure that its clients are aware whether the participant will be considering volumes and prices traded on other marketplaces (such as Liquidnet) when making trading decisions in the handling of client orders.”