TMX Group Inc. wants to make big changes to how its stock markets operate, to combat what a senior executive says is the “single biggest issue” facing Canadian equity trading – the possibility that more trading migrates to the U.S.
In the U.S., traditional stock markets have become increasingly less relevant as brokers do more and more business in alternative venues. That’s driven by what’s known as “payment for order flow,” which allows trading venues to essentially buy orders from brokers. In Canada, that is prohibited.
That creates a real risk that Canadian brokerages will want to sell their order flow to U.S. venues, steering it away from Canadian markets such as the Toronto Stock Exchange, says Kevan Cowan, head of the equity trading businesses at TMX.
BOYD ERMAN – Globe and Mail – OCTOBER 23, 2014.
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