The Board of Directors of the Canadian Trading and Quotation System Inc. has passed a resolution to amend its order entry rules to eliminate the restriction on CNQ Dealers entering orders that improve the market.

The changes to the order entry rules, which currently restrict the entry of “market improving” orders to Market Makers, would allow approved traders at all CNQ Dealers to enter orders and crosses on all securities, including orders for client and non-client accounts.

The changes would also impose a restriction that only a Designated Market Maker may enter orders on behalf of another participant on that security, regardless of whether the originating dealer is a CNQ Dealer or not.

“The proposed changes will not require any technological changes or development by CNQ Dealers. The rules will not require CNQ Dealers to enter orders directly, but will provide that option,” it says. “The order flow through Market Makers will be reduced, and orders for CNQ Dealers will be more easily identified in the CNQ system, allowing CNQ Dealers to more effectively manage their orders.”

“The removal of the restriction on entering orders that improve the market will for many dealers reduce or eliminate the need to handle all orders manually,” it adds. “In market data displays orders will be clearly identified by the clearing number of the originating CNQ Dealer, improving transparency and providing more accurate information to market participants and investors.”

CNQ says that the proposed rule change has been requested by listed companies, individual investors and dealers. “ CNQ is currently considering incentives for Market Makers to encourage continued participation, such as the elimination of trading fees for passive trades,” it adds.

The change still requires Ontario Securities Commission approval following public notice and comment.