Friday July 2, 1:17 pm Eastern Time
Canadian alternative trading systems to be regulated
TORONTO, July 2 (Reuters) - Canadian securities regulators proposed on Friday a governing framework for Alternative Trading Systems (ATS), intended to improve liquidity and allow for broader, more transparent access.
ATSs are automated matching systems that bring together buyers and sellers outside of traditional stock exchanges.
The proposal is one of a series of sweeping changes to be introduced this year on how and where Canadian securities are traded. It is open for discussion over the next 90 days, and will not be implemented until at least the year 2000.
''This tries to give Canadian investors the same type of access to all markets in Canada that currently exists in the U.S.,'' said Randee Pavalow, manager of market regulation at the Ontario Securities Commission.
Under Friday's proposal, Alternative Trading Systems must either take steps to become recognized exchanges in and of themselves, or join an existing exchange, or register as dealers with membership in the Investment Dealers Association of Canada, depending on the level of volume they deal with and what functions they carry out.
A regulatory framework for ATSs has been lacking in Canada, and is viewed as a crucial step to stem the tide of trading in Canadian securities flowing out of Canada to U.S. exchanges.
''ATSs are really about choice. If money managers or investors don't have the choice to use them they will take their business elsewhere,'' said Pavalow.
In the United States it is estimated there are about 100 ATSs in operation. In Canada only two -- Reuters Group Plc (quote from Yahoo! UK & Ireland: RTR.L) unit Instinet and Bloomberg Trade Book -- are authorized to trade foreign securities not listed on Canadian exchanges.
Under the new ATS framework, these two systems would be allowed to trade Canadian issues as well as foreign stocks.
|
