Trader at computer screen

The TMX Group Ltd. has received regulatory blessing for its new markets, which are due to launch in the fall.

Following a public comment process, the Ontario Securities Commission (OSC) approved the proposed creation of two new order books on the TMX’s Alpha Exchange Inc. — a lit market known as Alpha-X, and a new dark market, Alpha-DRK. There will also be two new order types: a “smart” limit and “smart” peg orders that aim to improve order execution.

TMX announced that, based on its own internal analysis as well as pushback it received through the comment process, the new markets’ static speed bump will be set at three milliseconds, down from the initial proposal of 10 ms.

“After careful analysis, we believe that [three] ms will provide participants adequate time to manage their orders throughout the post-trade market movement, and minimize adverse selection by delaying incoming liquidity-seeking orders for that duration,” the exchange said in the regulatory approval notice.

It said the 3-millisecond delay isn’t new, as it matches the top end of the current randomized delay on Alpha.

“We will continue to analyze and monitor the duration of the order processing delay in order to determine whether we are still achieving our goal of execution quality,” it said, noting that it may revise the delay in the future.

The new markets will launch Oct. 23, 2023.