TMX Alpha

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TMX Alpha
Alpha logo.jpg
Founded 2007; migrated to TMX in 2013
Headquarters Toronto, Canada
Key People Jos Schmitt, CEO from 2007-2012
Products Cash equities
Website http://www.alphatradingsystems.ca

TMX Alpha, formerly Alpha Trading Systems, is a Canadian-based Alternative Trading System (ATS) that was acquired in 2012 by the Maple Group consortium, which also purchased and now controls TMX Group. In April 2013, Alpha was migrated into TMX Quantum, TMX Group's proprietary trading engine.[1]

Alpha Trading Systems was launched in the fall of 2008[2] to challenge the dominance of the TSX Group in the domestic cash equities business.[3]

In its first six months, Alpha had reached 8.5 percent of average volume market share in securities listed on the Toronto Stock Exchange (TSX), across all Canadian transparent marketplaces.[4] By the time of its acquisition by Maple Group, Alpha had evolved into a full-fledged stock exchange earlier this year, with about 17 percent of the Canadian market for trading.

In June of 2015, TMX introduced minimum order sizes for brokers and a speed bump on TMX Alpha. The decision to introduce the speed bump came as the exchanged faced the prospect of competition from a new Canadian stock market called Aequitas NEO Exchange, which offers software that blunts what it views as unfair advantages enjoyed by high-frequency trading firms. The idea for speed bumps followed the publication of "Flash Boys," Michael Lewis's book that criticized high speed trading for being unfair.

Background

The venture – initially known as Project Alpha – was announced on May 3, 2007 by units of seven of Canada’s major investment dealers: Bank of Montreal, Canaccord Capital, CIBC World Markets, National Bank Financial, Royal Bank of Canada,Scotia Capital and Toronto Dominion.

They were joined by Desjardins Securities and the Canada Pension Plan Investment Board. The latter reportedly paid C$17.5m for a 10 percent stake.[5]

Cinnober Financial Technology was selected in October of 2007 to provide Alpha’s technology platform. Cinnober is also providing the platform for Turquoise, a planned European-based ATS.[6]

References

  1. Alpha trading platform moves to TMX Quantum. TMX.
  2. Canada's Alpha Trading plans for September launch. Reuters.
  3. Press Release. Alpha.
  4. Press Release. Cinnober.
  5. Canada pension board confirms stake in TSX rival. Reuters.
  6. Press release. Alpha.