(April 11 – 18:50 ET) – The Toronto Stock Exchange has issued a notice clarifying that its rule dealing with client-principal trades does not apply to trades processed through its Electronic Volume Weighted Average Price trading system.

The TSE says that its representatives will be contacting brokers and eligible institutional investors in the next few weeks for enrollment in the eVWAP trading system.

The eVWAP rules and policies were first published for comment on October 6, 2000. The proposed rules were then reviewed and approved by the Ontario Securities Commission on January 5. At that time, the commission approved a number of changes to the rules, the only substantive change was reducing the minimum order size for one-sided orders from 10 board lots to two board lots or 1,000 shares. This reduction in order size and other minor changes were made as a result of comments received during the comment period and comments made by the Ontario Securities Commission.

The TSE was concerned that the reduction of the minimum order size to two board lots may appear to bring eVWAP trades under the scope of its client-principal trading rule. This rule been amended to clarify that it does not apply to trades in the eVWAP facility.

The TSE notes that, “The inherent feature of the eVWAP Facility is to facilitate trades at a single assigned price. As a result, it is the opinion of the exchange that [the client-principal rule] does not apply to eVWAP trades as it is inconsistent with the inherent nature of the facility.”