The Toronto Stock Exchange says that the Ontario Securities Commission has approved amendments its rules to facilitate the implementation of the POSIT Call Market at the TSE.

These amendments were approved by the TSE back in the spring. They include a number of new definitions, as well as rules that have been added dealing with eligible orders, minimum order size, times of calls, restrictions on execution, and allocation within the POSIT Call Market.

The amendments also include a new rule allowing trades in the POSIT Call Market to be eligible to set the last sale price for a security, and exemptions from the short sale rule, in-house client priority rule (for eligible client orders only), and the uptick restriction in the Normal Course Issuer Bid Policy; and amendments to grant “eligible” institutional clients access to the market.

Back in November 2000, the TSE announced that it had entered into discussions to license and operate POSIT, a matching system for equity securities as a facility of the exchange. POSIT is a joint venture between ITG Inc. and BARRA Inc. POSIT has been approved by the U.S. Securities and Exchange Commission and currently operates in the U.S., U.K. and Australia.

The POSIT Call Market will offer an electronic equity matching system to brokerage firms and institutions and will allow for TSE-listed stocks to trade anonymously during timed calls during the day with no impact on the auction market. Trades will match at the midpoint of the bid/offer spread. The exchange believes that the introduction of the market will provide participants with the desired ability to anonymously trade stocks with other participants at mutually satisfying prices while eliminating “market impact” costs.

There will initially be two call sessions at approximately 10:30 ET and 14:30 ET each day. The actual match times within each call will be random (within a five-minute window of the time of the call). The random match times will minimize the ability of anyone to enter an artificial bid or offer into the auction market in order to affect the call price. Implementation of the POSIT Call Market is anticipated for first quarter.