Canada, although not a region of North America which is synonymous with electronic trading when compared with the proliferation of institutional business south of its border, a direction is emerging whereby the northern Dominion is becoming a strategic location of choice when considering connection to venues.
Today, BNY Mellon’s Pershing prime brokerage and broker-dealer solutions division announced that it has selected SunGard’s software-as-a-service based Valdi Market Access to provide connectivity to its international broker-dealer base in Canada.
The rationale behind this is to allow Pershing to connect directly to Canadian trading venues, supporting the firm’s growth plan to offer its clients enhanced trade execution in North America.
Prior to implementing Valdi Market Access for Canadian trading, Pershing relied on multiple local brokers for execution.
A point of interest with regard to this move is that whilst the United States has a very established electronic trading industry, Canada’s financial markets activity is concentrated in Toronto, which despite being North America’s third largest financial center, the city hosts a traditional a stock and equities market.
In March this year, TMX Atrium’s Managing Director Emmanuel Carjat explained to Forex Magnates that “Toronto is a significant hub for electronic trading of stock (equity) with eleven trading venues both lit and dark across three main liquidity centers in Toronto with the majority of those venues coming into existence at or around the time that the Order Protection Rule came into force in 2010.”
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This created a fragmented environment; an environment that still very much exists today.
Mr. Carjat explained further that “location for electronic trading is driven by a number of factors, including proximity to markets as well as power, scalability and access to other key liquidity centers.”
By accessing Canadian trading venues directly, Pershing can deliver new execution services to its customers while gaining the potential to realize cost efficiencies by outsourcing the service to SunGard.
“Offering our clients direct access to Canadian markets was a critical step for Pershing’s growth plan. Utilizing SunGard’s hosted infrastructure allows us to focus on our core business while better controlling costs” stated Derek Penn, Managing Director of Pershing in a commercial statement today.
James Corrigan, Senior Managing Director at SunGard’s Valdi added:”SunGard is seeing more and more firms looking to Canada as a focus for their North American trading businesses.”
“In order to achieve agile growth in this in-demand market, these firms must be equipped with solutions and services that can offer their clients direct access to trading venues and efficient models to help control costs” concluded Mr. Corrigan.