Toronto-based TMX Group Ltd. has set a date for shuttering its TMX Select alternative trading facility later this year as part of its plan to overhaul its equities trading business.
The exchange operator announced on Friday that it’s planning to decommission TMX Select after the close of trading on Fri., Sept. 18. The move comes as part of a plan unveiled last year to address some of the market structure issues that have arisen in recent years, including increased market complexity; the impact of the technological arms race in trading; and the threat of Canadian order flow migrating to the U.S.
Closing TMX Select and the Alpha IntraSpread marketplace catering to dark orders, which TMX Group also plans to shut down, is intended to help address some of these issues by reducing complexity and fragmentation and lowering dealer costs without compromising investor choice.
At the same time, TMX Group is also reforming the Alpha trading model in the hope of capturing order flow that’s currently utilizing these facilities by introducing a “speed bump,” rebating active flow and imposing a minimum size for passive orders.
The company is also planning to introduce new long-life order types later this year and making other changes to harmonize the operations of its various trading facilities.
As part of the process of closing TMX Select, TMX Group notes that its order entry and data feeds will be removed over the weekend leading up to Sept. 21. “To prepare for this change, customers are advised to review their routing and network configurations and plan accordingly.”