Chi-X, one of the early entrants into Canada’s fragmented ATS marketplace, which was launched in 2008, has partnered with NuPont, a consulting firm, to offer lower fee real-time market data for retail investors. Most major markets offer real-time market data in two fee categories, professional and non-professional. Chi-X, Canada’s new Retail Professional fee category, aims to lower market data costs and to encourage greater market participation for retail investors, and investment advisors who are currently grouped under the professional fee category.
Dan Kessous, CEO of Chi-X Canada, spoke about the new initiative to the media commenting, “We are sensitive to the rooted costs our clients and their customers face in today’s markets, and believe that we are in a position to help them bring about positive change to their business, whether for market data or trading. Chi-X has been and continues to be a catalyst in putting downward pressure on trading fees in Canada, and we are now looking to do the same for market data.”
Chris Lampropoulos, Executive Director, NuPont Canada Ltd., commented in a statement, “The sheer volume of technological, regulatory and market structure changes have presented a number of challenges over the past few years both in Canada, and internationally the trading community is still working to better understand the inter-relationships of these changes, and how to take advantage of new opportunities and strategies to reduce costs, particularly in the market data space. This is especially true today for retail businesses, which have the largest real-time data footprint in Canada, and where I believe there is opportunity for cost relief, by taking advantage of the new Chi-X retail professional fee.”
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Canada has been a magnet for the establishment of Alternative Trading Systems during the mid 2000’s, the competing venues to established exchanges, are regulated by the Investment Industry Regulatory Organization of Canada (IIROC), under the Securities Act (Ontario).
The regulator defines a marketplace as a facility that (according to the regulators website):
- brings together buyers and sellers of securities
- brings together the orders for securities of multiple buyers and sellers
- uses established non-discretionary methods under which the orders interact with each other.
Market analysis by Iress, a development firm, which measured order execution in Canadian stocks, found that between 30 and 35% of trading volumes is transacted through the ATS’s. Canada is home to over 8 lit and dark trading venues, including Bloomberg Tradebook Canada, Chi-X Canada / CX2 Canada, Instinet Canada Cross (ICX), Liquidnet Canada, MATCH Now (operated by TriAct), Omega ATS and TMX Select.
Since the Canadian stock exchanges merged under the Maple Group in 2012, the exchange has seen a downward shift in earnings and trading volumes. The average daily trading volume between January 2013 and July 2013 is US $5.3 billion, total volumes during this period have seen a decline of 10% from a year earlier.