TSX to launch alternative trading facility

TSX to launch alternative trading facility

The Toronto Stock Exchange is gearing up to launch a new trading facility designed specifically for "high-velocity traders" using automated and algorithmic trading strategies, which will operate alongside its central limit order book.

The Canadian exchange says its new facility, dubbed TSX Photon, will be based on its Quantum technology and feature a differentiated market structure and pricing schedule "optimised for high-velocity traders trading high-velocity symbols in a transparent auction market".

Thomas Kalafatis, VP TSX Markets, says specifically, TSX Photon will be based on a first-in first-out pricetime priority allocation and provide full broker anonymity.

"It is the first alternative transparent order book offered by TSX Markets in response to strong demand from automated traders who execute high-velocity trading strategies and models designed specifically for a fragmented marketplace," adds Kalafatis.

All participating organisations connected to its original central limit order book will have access to the new market upon launch.

TSX says the Photon market is expected to launch in 2009 subject to regulatory approval and development of its proprietary smart order router.

The Toronto exchange - which is merging with the Montreal Stock Exchange - launched its new Quantum dealing platform and pre-trade matching system, in December last year.

The exchange is facing increasing competition in the Canadian marketplace from start-ups like Pure Trading and alternative trading systems, including those operated by Liquidnet and Instinet.

Furthermore,last year seven of the biggest investment dealers in Canada disclosed plans to set up an ATS called Alpha in a bid to increase equity trading efficiencies and make the country more globally competitive.

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