(January 17 – 17:00 ET) – Effective April 16, the Toronto Stock Exchange is going to require that “internal crosses” be designated on the entry of the order.

An internal cross is defined as a cross between two client accounts of a brokerage firm which are managed by a single firm acting as a portfolio manager with discretionary authority to manage the investment portfolio granted by each of the clients.

An internal cross includes a trade where the broker is acting as a portfolio manager in authorizing the trade between the two client accounts.

The TSE says it is making this change to provide better transparency to the market. “As there is a change in the beneficial ownership of securities, trades between managed accounts are properly executed on the exchange. However, as the trading decision is being made by the same portfolio manager, the introduction of the internal cross order marker will allow market participants to more accurately gauge independent buying and selling interest in a particular security.”

Toronto broadcast feed messages for the intentional cross order type and for the trade report will include a tag to indicate whether the order is also an internal cross. Trades resulting from internal crosses will be broadcast on the Canadian Consolidated Data Feed and High Speed Vendor Feed with the marker “X”.
-IE Staff