NASDAQ’s Proposed Changes Should Be Paused For Costs, Benefits … And Canada’s Competitiveness

June 16, 2025 by Public Affairs

To achieve regulatory approval, the purpose of any proposed changes should be to render Canada’s marketplace more competitive than other marketplaces globally.

Marketplace venues continue to spend much time developing dark venues and order type functionality which mimics that of a trading desk because vertically integrating upstream allows them to capture more profit from the price discovery mechanism.

The continued fragmentation of the price discovery process and vertical integration should not continue unabated, without proper cost-benefit analysis on the impact of this fragmentation on Canada’s competitiveness and a meaningful look at alternatives.

A deliberate market-wide approach to reduce conditionality of orders and the creation of “free riding optionality” may enhance liquidity in subsets of the Canadian market and constitute a new uniquely competitive advantage.

On June 16, 2025, the Canadian Forum for Financial Markets (CFFiM) provided perspective to the following proposed changes to Nasdaq’s CXC Trading Book:

• Notice to expand the eligible orders that a Midpoint Extended Life Order (“M-ELO”) can execute against to include Mid-Peg orders that have been posted at the midpoint of the NBBO for the Minimum Resting Time (the MRT is 10ms today).  CFFiM Response: Nasdaq’s M-ELO

• Notice on proposed changes to the CXD Trading Book to: (i) remove Liquidity Seeking Orders from PureStream’s market model; (ii) introduce an independent CXD Conditional Order Book supporting CXD Conditional Orders; (iii) introduce of an Extended Firm-Up Time Conditional Order; (iv) introduce PureStream Connect (allowing CXD Conditional Orders to interact with PureStream Orders); and (v) introduce CXD Connect (allowing eligible orders entered in the CXD Central Limit Order Book to interact with CXD Conditional Orders.  CFFiM Response: Nasdaq’s Further Changes to CXD Trading Book

With very limited disclosure, these proposals appear to risk increased cost without clear economic benefit to firms or consideration of alternatives.

In the absence of complete cost-benefit analysis, it is unknown whether fair, orderly, and competitive Canadian markets may be maintained.

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CFFiM: No Cost-Benefit Exemptions for Cboe’s Proposed Primary Peg

June 23, 2025 by Public Affairs

Cboe Canada Inc.’s (“Cboe”) proposed new order modifier, the Primary Peg, is another ‘me too’ copy and paste of orders available in other Canadian and U.S. marketplaces. 

Providing Cboe market participants with the same benefits that are available to participants on other markets that offer this order type is understood. 

Proper cost-benefit analysis of any proposed public interest rule amendment remains necessary as set out here.