Notice of Proposed Change and Request for Comment - Change to the MATCHNow Trading System - TriAct Canada Marketplace LP

MATCH Now orders and notices

TriAct Canada Marketplace LP (also known as MATCHNow) has announced plans to implement the change described below, following approval by the Ontario Securities Commission (the OSC). MATCHNow is publishing this Notice of Proposed Change in accordance with the "Process for the Review and Approval of Rules and the Information Contained in Form 21-101F2 and the Exhibits Thereto". Market participants are invited to provide the OSC with comments on the proposed change.

Feedback on the proposed change should be in writing and submitted by August 24, 2019 to:

Market Regulation Branch
Ontario Securities Commission
22nd Floor
20 Queen Street West
Toronto, Ontario M5H 3S8
Fax: (416) 595-8940
e-mail: [email protected]

And to:

Kuno Tucker
Chief Compliance Officer
MATCHNow
The Exchange Tower
130 King Street West, Suite 1050
Toronto, Ontario M5X 1B1
Fax: (416) 874-0690
e-mail: [email protected]

Feedback received will be made public on the OSC website. Upon completion of the review by OSC staff, and in the absence of any regulatory concerns, notice will be published to confirm the completion of OSC staff's review and to specify the intended implementation date of the Change.

If you have any questions concerning the information below, please contact Kuno Tucker, Chief Compliance Officer for MATCHNow, at (416) 874-0830.

 

Trade Message Fee Marker

A.            Detailed description of the proposed Significant Change

MATCHNow intends to provide Subscribers with the benefit of having the option of receiving a trading fee message attached to their executions. Currently, Subscribers only see their trading fees when they receive their daily trade diary (T+1) or on their monthly invoice. With this change, MATCHNow will send a new FIX Tag and tag value inside a Subscriber’s partial fill or fill messages. The feature will be available on drop copy FIX sessions and order entry FIX sessions. The Fee Marker FIX Tag will always be present on the drop copy sessions, but will be optional on the order entry sessions.

Using a FIX Tag, Subscribers will be able to map the trading fees to a specified (as yet to be determined) value, which will allow Subscribers to see their MATCHNow trading fees intraday. The value sent back in the new tag will reflect how a client will be billed for that particular trade.

Example: A value of ‘E’ might mean that the client was a passive supplier of mid-point liquidity in a small-cap stock. The Subscriber could then reference our fee schedule and, at its will, map that trade to a dollar amount. We will also include the new values on MATCHNow’s website as part of our fee schedule.

We also note that the proposed change was previously filed, as a Significant Change subject to Public Comment, in June 2017; however, following a concern raised in a July 2017 comment letter from the Canadian Securities Traders Association (the CSTA) to the proposed change — in the form in which it was proposed at the time — we decided to withdraw it, as explained in a September 2017 Notice. After further review, we have decided to file a new version of the proposed change at this time; while similar to the June 2017 proposal, in the current version, we have eliminated the element that caused the concern raised in the July 2017 CSTA comment letter — namely, the risk of information leakage from fee markers relating to unintentional crosses — insofar as all unintentional crosses will now show as billable trades.

B.            Expected implementation date

The proposed change is expected to be implemented 90 days after approval by the OSC.

C.            Rationale for the proposed change and any supporting analysis

This proposed change will permit Subscribers to monitor their trading costs on MATCHNow in real time. This feature has been requested by multiple Subscribers.

D.            The expected impact of the proposed change on market structure, subscribers, and, if applicable, investors and capital markets

This change should not have any impact on market structure or Subscribers.

E.            Expected impact of the proposed change on MATCHNow’s compliance with Ontario securities law, including the requirements of fair access and the maintenance of fair and orderly markets

The impact of the proposed change will be to maintain MATCHNow’s compliance with Ontario securities law, including fair access and the maintenance of fair and orderly markets.

F.            Consultations undertaken in formulating the Significant Change

MATCHNow was asked by multiple Subscribers for this feature in recent months, as well as in the past.

G.            If the Significant Change will require subscribers or service vendors to modify their systems after implementation of the Change, the expected impact of the Change on the systems of subscribers and service vendors together with a reasonable estimate of the amount of time needed to perform the necessary work

MATCHNow notes that making use of the feature that the proposed change will create is voluntary. We do not know how much work will be needed by Subscribers and vendors to implement this change. Moreover, we could not make a reasonable estimate of the time needed for Subscribers and vendors to modify their own systems as a result of this change, as this will depend on the specific circumstances of each Subscriber or vendor, and any estimate would be somewhat unreliable until the Subscriber or vendor begins the user acceptance testing process.

H.            If applicable, whether the proposed Significant Change would introduce a feature that currently exists in other markets or jurisdictions

This feature has been in use for several years on marketplaces in the United States.