The TSX Inc. announced on Thursday that it is planning to launch a trading service for U.S.-listed securities that will allow Canadian investors to trade U.S stocks in Canadian dollars.

The TSX is seeking comment on a plan to introduce a separate board, to be known as the TSX International Board, that will post for trading certain U.S.-listed securities in Canadian dollars. According to a regulatory notice seeking comment on the proposal, the initiative is designed to give Canadian investors easier access to these stocks; and, to create additional trading activity and efficiencies for dealers.

“Canadians will have increased optionality, flexibility and accessibility to trade such securities,” the TSX says in its notice. For instance, the new service would reduce the need for Canadian investors to open and fund a U.S. dollar account. It will also lower overall foreign exchange costs for investors, the TSX says.

The new system “will also provide increased trading options for investors that already trade U.S.-listed securities, and increased transparency to investors regarding the impact of currency changes on the value of U.S.-listed securities held in their Canadian dollar-denominated account,” the notice says.

The TSX says that dealers will benefit from new trading opportunities for clients, as well as reduced friction in the clearing and settlement process. “Smaller dealers may particularly benefit to the extent that offering trading in U.S.-listed securities to their clients necessitates costly and complex southbound trading and clearing relationships,” it says.

The TSX will not list the U.S. securities itself; rather, it will post them for trading in the same way that Canadian alternative trading systems currently post TSX-listed securities for trading. The new board will not include interlisted securities.

The TSX notes that it will initially offer trading in the constituents of the S&P 500 index. It will also phase in trading in these stocks, starting with 30-50 names. Other liquid U.S.-listed securities may also be added, based on demand, it says.

The proposal requires a number of changes to the TSX’s rules, and regulatory approval. These changes are out for comment until Jan. 31, 2017, and are expected to take effect in the second quarter next year.

Photo copyright: bluebay/123RF