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TSX Group Inc. is enhancing its equity fee structure to further incent market making firms that supply liquidity to Toronto Stock Exchange. TSX market makers ensure efficient and orderly trading, reduced volatility, and support for the retail investor. The impact on TSX Group Inc. overall trading revenue is expected to be neutral.
Market maker fees for their symbols of responsibility in the post-open continuous market will be:
| High priced equities | Low priced equities | |
|---|---|---|
| Active trades | $0.0032 charge | $0.0003 charge |
| Passive trades | $0.0032 rebate | $0.0003 rebate |
| Net fee cap | $0.00 | |
| ETF fees | same as above | |
| Credits | applied to firm-wide fees net credits generate rebate |
High priced equities = $1.00
Low priced equities < $1.00
Fees for Market On Close (MOC) and Extended Session remain unchanged
Other changes affect Iceberg credits and trades against market makers
TSX now incents firms capable of providing significant passive liquidity by eliminating all restrictions on passive liquidity credits and applying 100% of these credits against the firm's total monthly trading fees.
TSX is also announcing the introduction of free printing for intentional crosses. Free printing of crosses should ensure the trading community continues to have access to information in a centralized fashion from the principal marketplace.
Thomas Kalafatis, Vice President, Sales and Product Development for TSX Markets said “Market makers play a vital role in the operation of an accessible and fair market, and we are happy to provide enhanced incentives that encourage these activities. Developments like market maker fee reductions and free printing of intentional crosses, and the introduction of the new trading engine TSX Quantum, allow us to improve the market for all of our customers.” He reiterated that the new fee schedule has incentives that support both retail and institutional trading.
Lorne Levy, President and CEO of Byron Securities, is pleased with the changes. "In today's environment of market fragmentation, we're extremely pleased that TSX is actively supporting and rewarding liquidity providers, and providing cost savings to help us offset some of the ever increasing costs imposed on us by this market fragmentation."
Matt Taugher, Partner at The Independent Trading Group (ITG) said “This is a critical time in Canadian markets with dark pools and other modes of trading competing in a way that fragments the market. We are pleased to see TSX's strengthening commitment to the principles of visible price discovery and recognizing the important role market makers play.”
"The continuing efforts of TSX to provide a fair and reliable platform for all market participants is very much in line with the market's expectations of our primary exchange. The results will be tighter spreads and more visible liquidity in TSX listed names" said Peter Deeb, President & CEO, Hampton Securities Ltd. "In a time where other Canadian market structures and ATS's are evolving to cater to the larger institutional customers only, TSX's new market maker incentives will directly benefit every investor in our marketplace."
