TSX Inc. is proposing to expand its order types to allow for anonymous broker preferencing.
In a notice, the TSX set out plans to revise its rules to allow broker preferencing — matching a dealer’s orders with orders from the same firm ahead of orders from other dealers — against passive dark orders.
Currently, the TSX only allows broker preferencing on attributed orders.
The changes, which are out for public comment, are intended to respond to client demand, and to match similar functionality on other markets, the notice said.
“Broker preferencing on unattributed dark orders is becoming the industry standard in Canada,” it said.
Assuming that the proposals are approved, the exchange intends to implement them as early as the first quarter of 2021.
“TSX anticipates a minor positive impact for some members and investors in that they could further benefit from reduced intermediation on their unattributed dark orders,” it said, adding that the change is also expected to increase execution quality and lower trade costs.
Comments on the proposals are due by Dec. 7.