Pure competitor Alpha told to send feed to TMX

2010-03-16 14:49 ET - Street Wire

by Stockwatch Business Reporter

During the week ended March 12, 2010, Canada's top three alternative trading systems -- Pure Trading, Alpha Trading Systems and Chi-X Canada -- handled 24.4 per cent of stock trading in Canada, which covers all listings on the Toronto Stock Exchange, the TSX Venture Exchange and the Canadian National Stock Exchange. The most active ATS was Alpha which averaged 181 million shares per day, followed by Chi-X Canada with 29.3 million shares per day. Pure Trading traded 6.9 million shares per day, a hefty drop from the week prior of 12.4 million.

It seems Alpha is testing the patience of the Canadian Securities Administrators (CSA) by not providing its market data to the TMX Group's Information Processor (TMX IP). On March 2, Stockwatch wrote a story about Alpha stalling on sending its feed to the official feed consolidator, the TMX. On March 9, Ben Dummett of Dow Jones Newswires joined the story. According to his story of that day, Susan Greenglass, the director of market regulation at the Ontario Securities Commission, sent a letter to Alpha on March 3 -- the day after Stockwatch's story about Alpha's stalling -- requesting the ATS provide order and trade data to the TMX IP by Monday, March 8. Mr. Dummet says Ms. Greenglass sent the letter on behalf of the CSA.

Apparently the letter, which the OSC is not making public, does not indicate any consequences the ATS would face if it does not comply with the OSC's request. Alpha has not yet complied. Jos Schmidt, Alpha's chief executive officer, said he expects Alpha will provide market data to the TMX IP in a few weeks. Negotiations, Mr. Schmidt explained, had been going slowly. All of Canada's other ATSs, including Chi-X, Omega ATS and Pure, have been supplying the TMX IP with their market data since the summer of 2009 when the CSA appointed the TMX Group to oversee an official consolidated market feed. Participation was not supposed to be optional.

The TMX IP will not be the only supplier of a consolidated feed. In October, 2009, Alpha supported a proposal by Thomson Reuters to offer a consolidated feed of all Canadian exchanges. The Thomson Reuters feed is now due in the second quarter of 2010. Chi-X Canada is also supporting a consolidated feed. In February, 2010, the ATS partnered with Atrium Network to launch a consolidated feed which they say is due in mid-March.