Alternative trading system Chi-X Canada ATS Ltd. is bringing competition to trading at the close with a new market-on-close order type.

Chi-X Canada has received regulatory approval from the Ontario Securities Commission (OSC) to introduce its own market-on-close (MOC) order type. Its proposal for introducing the new facility for trading at the close was published for comment earlier this year, and it received five comments (from four dealers and one trade association) that were all “strongly supportive” of the proposed new order type.

Among other things, support for MOC orders is grounded in the hope that that it will place competitive pressure on the TSX, and lead to lower costs for transacting at the closing price.

According to a summary of the comments received on the proposal, “The importance of introducing competitive pressures for the TSX MOC facility was highly emphasized given the lack of growth of market-on-close volumes in Canada whereas
in the United States market-on-close market share has flourished from 1.7% to 5% over four years.”

Chi-X Canada says that it is looking forward to “bringing benefits to the industry and lowering costs for the dealer community.”

“The MOC has been without viable competition for a long time and is currently priced over twice as high as similar orders in other jurisdictions. There is no doubt that we can offer competitive pricing that will have an immediate benefit to the trading community and bring liquidity back into the market,” said Dan Kessous, CEO of Chi-X Canada.