TORONTO, June 5 /CNW/ - The Canadian Securities Administrators (CSA)
today published CSA Staff Notice 21-309 Information Processor for
Exchange-Traded Securities other than Options. The notice informs the public
that TSX Inc. (TSX) will act as an information processor for exchange-traded
securities other than options, commencing July 1, 2009 for a period of five
"In today's multiple marketplace environment, data consolidation is
important for both marketplace participants and investors. An information
processor would ensure that they have access to information from all of the
marketplaces," said Jean St-Gelais, CSA Chair and President, Autorité des
In July 2006, the CSA published a notice inviting any interested party to
file an application to become an information processor for exchange-traded
securities. An information processor provides consolidated data to investors
and market participants, facilitating compliance with regulatory requirements.
The Bourse de Montréal Inc. (MX), CDS Inc. (CDS), and TSX submitted
applications. Since the initial filing, the MX and CDS withdrew their
applications. Over the course of the application process, the TSX also revised
its proposal. The CSA is of the view that the revised TSX proposal meets all
of the criteria set out in the 2006 notice. The information processor is
designated as a market participant under the Securities Act (Ontario) and has
been recognized as an information processor under the Securities Act (Québec).
During the review process, the CSA evaluated the applications to assess
the applicants' ability to meet the requirements of National Instrument 21-101
Marketplace Operation including requirements related to: the applicant's
systems and performance capabilities; standards and procedures for the
collection, processing, distribution and publication of data; marketplace
access to the information processor on fair and reasonable terms; sufficiency
of financial resources; qualification of personnel; and existence of other
information processors. The CSA also considered the applicants' governance,
processes to manage inherent conflicts of interest, fee structure and the
fairness of their revenue allocation methods.
CSA Staff Notice 21-309 is available on the websites of the various CSA
members. For more information, please refer to the attached backgrounder.
The CSA, the council of securities regulators of Canada's provinces and
territories, coordinates and harmonizes regulation for the Canadian capital
CSA Staff Notice 21-309 Information Processor for
Exchange-Traded Securities Other Than Options
Questions and Answers
1. What information will TSX as the information processor offer?
TSX as the information processor will disseminate the following
- "Consolidated Data Feed", which will provide access to pre- and
post-trade market data from each contributing marketplace;
- "Consolidated Last Sale", which will provide consolidated,
real-time last sale data from all contributing marketplaces; and
- "Canadian Best Bid and Offer", which will provide a consolidated
best bid and offer for all equity securities
The inclusion of a consolidated depth-of-book product will depend on
the outcome of the discussions relating to the proposed CSA
Trade-Through Protection Rule (amendments to National Instrument
21-101 Marketplace Operation and NI 23-101 Trading Rules published on
October 17, 2008). The consolidated depth-of-book product would
provide a single consolidated view of the order book.
2. Are market participants required to purchase the information provided
by the information processor?
No. The information processor is not the only source from which
real-time data can be obtained. Participants may rely on other data
sources to obtain the data that they need, such as information
vendors or direct data feeds from the marketplaces.
3. How will TSX address the conflicts of interest, whether real or
perceived, associated with it being a competing marketplace and an
The primary steps to be taken by TSX in addressing potential
conflicts of interest are as follows:
- a Governance Committee with marketplace representation will be
established that will make decisions with respect to significant
areas of the operations of the information processor;
- policies and procedures will be established to ensure that TSX
staff who are not involved in operating the information processor
do not acquire knowledge of, or access to, competitor data or
- agreements with contributing marketplaces will include detailed
terms that will ensure, on a commercial basis, that data
transmitted to the TSX information processor will not be
inappropriately manipulated by TSX; and
- third party technology, that will be independent from the
technology of the exchanges owned and operated by TSX, will be
used to consolidate the data.
In addition, TSX has provided undertakings (included at Appendix B to
the Notice) to address governance and conflicts, including that the
TSX information processor will not give the Toronto Stock Exchange or
TSX Venture Exchange an unfair advantage with respect to their data
as compared to other marketplaces.
4. Why is TSX allowed to act as an IP given the recent data outages?
The recent data outages related to the dissemination of TSX's own
trading data. The Consolidated Data Feed technology to be used for
the information processor function was unaffected and continued to
disseminate consolidated data for all other marketplaces that use the
service. More information can be obtained from the TSX.
5. What is the impact of the information processor on fees for market
The information processor's fee model maintains the status quo with
respect to market data fees. Marketplace participants will continue
to pay current fees charged by each marketplace for consolidated data
obtained through the information processor. We expect that data fees
will not increase as a result of the introduction of an information
processor. In addition, we note that we will be monitoring
marketplaces to ensure that the fees they charge, and pass through
the information processor, do not unreasonably prohibit, condition,
or limit access to their services.
The CSA will begin a review of market data fees and will, upon the
completion of this review, determine what, if any, steps may be
needed to address any issues. We note that because it is important to
have an information processor established now to consolidate data
from multiple marketplaces, we decided not to delay the introduction
of the information processor until the completion of this review.
For further information:
For further information: Carolyn Shaw-Rimmington, Ontario Securities
Commission, (416) 593-2361; Sylvain Théberge, Autorité des marchés financiers,
(514) 940-2176; Mark Dickey, Alberta Securities Commission, (403) 297-4481;
Ken Gracey, British Columbia Securities Commission, (604) 899-6577; Ainsley
Cunningham, Manitoba Securities Commission, (204) 945-4733; Wendy
Connors-Beckett, New Brunswick Securities Commission, (506) 643-7745; Natalie
MacLellan, Nova Scotia Securities Commission, (902) 424-8586; Barbara
Shourounis, Saskatchewan Financial Services Commission, (306) 787-5842; Janice
Callbeck, Department of the Attorney General, Prince Edward Island, (902)
368-4552; Doug Connolly, Financial Services Regulation Div., Newfoundland and
Labrador, (709) 729-2594; Fred Pretorius, Yukon Securities Registry, (867)
667-5225; Louis Arki, Nunavut Securities Office, (867) 975-6587; Donn
MacDougall, Northwest Territories Securities Office, (867) 920-8984