Securities administrator has published proposal
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The practice of trading marketplaces charging a fee to one party of the trade and paying a rebate to the other party is being examined by the Canadian Securities Administrators.
In a notice published for comment, the CSA notes that the predominant trading fee models that have emerged in the Canadian equities market are the "maker-taker" trading fee model and the "inverted maker-taker" fee model.
Both models use fees and rebates and the CSA wants to examine the impact of prohibiting the rebate payments.
"The Proposed Pilot would provide valuable information regarding the impact of trading fees and rebates on the behaviour of market participants, and market quality in general," said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
If the Proposed Pilot goes ahead, there will be a temporary ban on Canadian marketplaces, including exchanges and alternative trading systems, from paying trading fee rebates to dealers for executing orders for a sample set of equity securities.
A similar pilot is proposed by the SEC in the United States and it’s intended that they would run concurrently.
Canadian securities regulators publish trading fee rebate pilot study for comment>> https://t.co/kACyiSb3Pe pic.twitter.com/x8IpJyCys6
— OSC News (@OSC_News) December 18, 2018
