The Alpha Group will implement a new trading fee structure as of Aug. 1, subject to regulatory approval, it revealed on Monday.

Jos Schmitt, CEO of Alpha Group, noted that “The rationale behind the changes is two-fold: to help reduce the cost of trading and to promote liquidity.”

To help reduce the cost of trading, Alpha Group will implement three changes:

The first is to reduce the active fees for low-value securities (worth less than a dollar) by almost 30%, which makes Alpha the lowest-cost venue for low-value securities. This fee decrease affects 35% of the total volume traded in Canada across all marketplaces — those trades where the cost impacts the dealer community most.

The second change is to remove any fees for trades executed in the opening auction, which comprises a substantial portion of the overall trading cost for all dealers in Canada. Alpha Group understands that many dealers are trying to maximize the volume traded at the opening due to the cost of trading during the continuous market. Now, not only is the cost of trading during the continuous market lower, but moreover, trading at the opening is free on Alpha.

The third change is to remove the premium that was charged for odd-lot trades in TSX Venture Exchange-listed securities.

To promote liquidity, Alpha Group will increase the passive fee rebate for high-value securities (greater than, or equal to, $1). This increase puts Alpha at the highest rebate levels in Canada and, in keeping with its philosophy of not privileging anyone, is available to all dealers regardless of their volume traded. These are the securities where there is still room for improving the market spread, and increasing the rebate will support more aggressive quotes.

“The cost of trading in Canada, is getting out of control”, added Schmitt. “This is the result of multiple factors: a large increase in active trades, venues applying high active fees for low-value securities, venues that apply complex fee structures preventing dealers from fully understanding what is driving their trading costs, and venues that put their profitability ahead of the interests of the industry. Living by our mantra of ‘For the industry, by the industry’ and having, thanks to our growth, the financial capacity to absorb it, we decided it was time to step in and introduce some major improvements to our fee structure to help tackle this issue.”