As in the U.S. and the UK, alternative trading systems in Canada have caught the eye of CSA regulators intent on not being left behind. Canada already has two dark pools (Liquidnet and MATCH Now) and several other alternative trading systems (ATS, including Alpha ATS, Omega ATS and Chi-X). These can no longer be ignored.

On September 30, the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) issued a consultation paper entitled Dark Pools, Dark Orders and Other Developments in Market Structure in Canada. According to IIROC, the trading over dark pools remains relatively small in Canada– 0.7% of total volumes and 1.25% of total value over the twelve month period ended September 30, 2009. But ATSs account for 12% of the value traded in Canada during that period, a number which is climbing rapidly and eating away at the dominance of the TSX.

Although Canadian regulators will be examining many of the same issues as regulators in the U.S. and the UK, there are already differences in how these systems are addressed. For example, the lack of transparency with dark pools (both pre-trade and post-trade) is an issue in the U.S. In Canada, however, all alternative trading systems (including dark pools) are required to maintain post-trade transparency.

We at Westlaw Business have compiled a few resources to provide you with some insight into Canada’s dark pools and other alternative trading systems.