Each MATCHNow® Subscriber must be a Canadian Registered Investment Dealer, an Investment Industry Regulatory Organization of Canada (IIROC) member, and under IIROC jurisdiction. A Subscriber must also be a Participant of each Canadian marketplace to which it intends to transmit unfilled balances of MATCHNow® Marketflow / smart routed orders. To become a MATCHNow® Subscriber, dealers need to execute the “MATCHNow® Subscriber Agreement” and must report and settle all MATCHNow® trades through CDS. Please contact a TriAct representative if you wish to sign up or enquire further.
Getting StartedHow do dealers sign up for access to MATCHNow®?
Qualified Canadian and foreign institutional clients and foreign dealers can directly access MATCHNow®, but only through a sponsoring Dealer Subscriber. Direct Access Clients’ use of the MATCHNow® system is subject to certain terms and conditions specified in the TriAct Subscriber Agreement.
If Subscriber provides direct access to MATCHNow® to its clients (“Direct Access Clients”):
- prior to granting such access, Subscriber shall execute with each Direct Access Client a binding legal arrangement containing, among other things, the terms specified by TriAct from time to time;
- it shall ensure that each Direct Access Client has direct access to all marketplaces (a) on which the security for which an order is entered is listed or quoted, and (b) to which unfilled balances of its MATCHNow® orders may be routed, and Subscriber will immediately revoke a Direct Access Client’s access to MATCHNow® if that Direct Access Client ceases to so qualify by notifying TCM;
- it shall ensure that Direct Access Clients conduct their trading activities in compliance with the Regulatory Requirements; and
- in addition to all other account documentation, it shall ensure specifically that it has the right, at any time and for any reason, including if compelled to do so by any regulatory authority or TriAct, to discontinue receiving orders from any Direct Access Client.
Subscribers will typically connect via their third-party Access Vendor or sponsoring Dealer Subscriber. Subscribers that maintain their own proprietary market connections can also connect directly to MATCHNow® for the purpose of transmitting orders. Access Vendors must sign the “TriAct Network Connectivity Agreement” and will be provided with the MATCHNow® Access Vendor Guide and MATCHNow® FIX Developer’s Guide. Please contact a TriAct representative for more information.
This is one of MATCHNow’s true advantages. MATCHNow® simply appears as another three market destinations on your existing trading workstation. Many smart order routers and algorithms will automatically check MATCHNow® for price improvement opportunities before routing to other marketplaces.
Yes. All stocks that trade on the TSX and TSX Venture trade on MATCHNow®, including USD dollar denominated, debentures and investment receipts, as well as Aequitas listed securities.
On all days the TSX is open for trading, MATCHNow® will be available for order entry from 8:00am daily, and will operate during traditional market hours, 9:30am until 4:00pm ET.
TriAct collects trading fees based on executions for its Subscribers. MATCHNow® trading fees are competitive and innovative; offering savings vs. traditional Canadian exchange fees. Please contact TriAct support for further details.
TriAct provides a daily trade file to CDS. Subscribers (Canadian Registered Investment Dealers) will report and settle MATCHNow® trades through CDS, just as they currently do with TSX transactions (i.e. CNS).
MATCHNow’s fee schedule can be found here.
The Mechanics of MATCHNow®What exactly is meant by the terms “Liquidity Provider (LP)”, “Odd Lot Liquidity Provider (OLLP) and “Marketflow (MF)” orders?
These are the three styles of orders entered into MATCHNow®:
- Marketflow / smart routed orders are not booked in MATCHNow®. Marketflow orders are treated as Immediate or Cancel (IOC) orders when they check MATCHNow® for liquidity. Marketflow orders are eligible to receive a full or partial fill. Orders with limit prices that cross the spread are routed to the MATCHNow® Marketflow Destination trying to trade inside the quote before crossing the spread on other markets. Unmatched portions of Marketflow orders are returned to the initiating Access Vendor for routing to another marketplace.
- LP orders sit passively and confidentially in the MATCHNow® book, trading with other LP orders and Marketflow orders.
- OLLP orders are passive, confidential orders that remain in the MATCHNow® Odd Lot book as day orders. An OLLP order will be rejected if it is less than the round lot size minus 1 (e.g. 98, 498, 998 shares). An order dropping below the round lot size shares minus 1 will be returned back as “Nothing Done.”
The following orders are accepted:
- Day orders
- Buy / Sell / Sell Short / Sell Short Exempt
- Market / Limit
- Client / Non-Client / Specialist / Inventory
- Board-Lot / Mixed-Lot / Odd lot
- Minimum Fill
- Program Trade
LP orders and portfolios can also include special optional settings, such as buy/sell cash imbalance, please see our fix spec for more details.
No, the time an order is received by the system does not weigh into its standing in the MATCHNow® book. When a match occurs, shares are distributed on a pro-rata basis among Liquidity Providing orders. The system’s goal is to maximize total volume traded. Orders with constraints may execute behind those without.
MATCHNow® utilizes a proprietary pro-rata matching algorithm that is designed to reward size while optimizing allocations to ensure maximum participation on every match. The pro-rata algorithm begins with a standardized pro-rata allocation process and rounds all allocations down to the nearest board lot. This ensures that users are only allocated board lot fills and the pro-rata rewards larger orders with more shares.
The remaining unallocated shares are then used to either help fulfill orders with restrictions or are split up into board lots and are randomly assigned to orders that have not received an allocation during the initial allotment. This process allocates board lots to larger orders and works down the order size list. If there are multiple orders with the same size a randomization process is used to assign the board lot.
If an order with restriction still cannot be satisfied the orders allocated shares are split up among other orders with the priority again given to large sized orders.
For more information please refer to the MATCHNow In-Detail Document.
MATCHNow’s proprietary allocation algorithm allows for list orders. A list is defined as multiple and different symbols that can be on one side or both sides of the market.
Certain constraints may be specified for a complete list of orders submitted to the MATCHNow®-Liquidity destination. The Marketflow destination does not support lists. These constraints apply to all orders with the list and take precedence over constraints specified at the user default, or system default levels. List orders accept the same attributes and constraints as single orders and allow for the setting of cash constraints. Cash constraints allow the setting of a buy imbalance value and or a sell imbalance value as part of the list instructions. List constraints are specified in the ListExecInst (Fix Tag 69) field of the FIX New Order-List message.
For matching and allocation, the individual orders in the list will be handled the same as a single order when a contra order is received and an auction is run for that symbol. If the order from the list can participate in the auction (i.e. limit price is marketable, the current cash imbalance for the entire list allows for at least one board lot to trade and any minimum or tradelet restrictions are less than the contra order) it will follow the same matching priority and allocation process as a single order with one exception, it will only trade up to and not exceed the net cash constraint value at the time of the auction. The pro-rata allocation applies the same as for single orders. When the matching engine is evaluating restrictions on the orders in the auction, the optimization process will enforce the cash constraint rule by never allocating too many board lots to the list order which would cause a violation of the cash constraint. The shares that exceed the cash constraint are allocated back to other orders that can take those shares.
Yes. Orders with the same broker number will always match first. Anonymous orders will match first with the same (underlying) broker number but print under #001.
The price is based on the real-time Canadian best bid/offer spread (or CBBO) at the time of execution, calculated by MATCHNow® using quotes from all protected Canadian marketplaces with pre-trade transparency. MATCHNow® is a reference market and trade prices are not based on order limits. The CBBO spread is simply split 50:50 Minimal Price Improvement: caps the price improvement provided by the passive participant to the regulatory minimum of 1 tick, or ½ a tick when the spread is 1 tick wide.
For a MATCHNow® Marketflow / smart routed order, the execution occurs immediately upon entering MATCHNow. For Liquidity Providing orders, the execution occurs during the next 3-second automated call. For OLLP there is no action call for the odd lot liquidity resting orders.
MATCHNow® will accept orders, but will not execute trades when a stock is not in a normal, open state. Liquidity Providing (LP) orders will remain in the MATCHNow® book and begin trading if / when the stock is opened for trading. Marketflow / smart routed orders will be immediately returned with nothing done, and will route via an Access Vendor to the user’s next chosen market destination.
Public trade reports will be disseminated in real time to data distributors via TSX Datalinx and the TMX Information Processor in standard (TL1 and TBF) format. Data distributors are encouraged to integrate MATCHNow® trades with TSX and other markets’ trades in their “time and sales” displays, VWAP calculations, market share statistics, etc.
MATCHNow’s system returns a real-time FIX execution report for each trade to the originating Access Vendor (and on to the end user’s trading workstation). In addition to public trade data, real-time private order trade data will be disseminated in standard (TBF) format. Where vendors currently provide this type of data to brokers, MATCHNow® data can be integrated into the same feeds.
The new Short Marking Exempt (SME) tag has been required by regulators for non-directional accounts. Dealers must ensure all orders from Short Marking Exempt accounts include the SME designation in the FIX order message.
Until March 29, 2013 dealers may continue to use the “Short Exempt”, “Short Exempt” with SME, or “Short Sale” with SME to be in compliance with the SME order type. MATCHNow will accept these order types and report them as SME orders. From April 1, 2013, all marketplaces including MATCHNow® reject “Short Exempt” orders and “Short Sale” orders also marked with the SME tag.
The SME tag will be communicated using tag 7729 with no preset default. A FIX tag coded 7729=0 indicates a SME order. The SME FIX tag should only be added to the SME designated accounts, all other orders should not include this FIX tag.
Risks / ConcernsWill I “miss the market” if I send an order to MATCHNow® and don’t get a fill?
MATCHNow® works closely with all Access Vendors to reduce the round trip time when checking for liquidity in MATCHNow®. MATCHNow® has co-located all of the production servers to the TSX Markham site which has significantly reduced the risk of missing the market. MATCHNow® continues to examine this topic and has found no statistical proof of a fading quote, please see our studies here.
Yes. MATCHNow® is designed to work within UMIR to minimize regulatory risk. Please contact a TriAct representative for details.
All data collected by MATCHNow® is retained within the MATCHNow® system. No confidential information about orders resting in MATCHNow® is sent to any Access Vendor. On March 15, 2013 MATCHNow® decommissioned the LIP Feed.
Traders cannot make enquiries; only valid orders can be sent to MATCHNow®. A trader trying to game the system could send an order to buy, for example, 500 XYZ; when he receives nothing done, he might surmise there is no liquidity in the book, when actually, there may be thousands of shares in the book with a minimum fill or other constraint. Conversely, a trader that receives a fill when attempting to game the system might incorrectly assume there is significant supply/demand in the book, when in fact, there is very little. Additionally, all orders can be tagged “anonymous”; so even after a trade is printed, broker identity is protected.
Ways to Use MATCHNow®How can retail orders benefit from MATCHNow®?
Orders executed in MATCHNow® can be filled at a price inside the CBBO. As such, when an order on its way to a transparent exchange “dives into” MATCHNow® for an execution, the order is filled at a better price than the customer expected. Many dealers will expose 100% of their retail order flow to the potential price improvement in MATCHNow®. If an execution does occur in MATCHNow®, the customer achieves a better-priced fill and the dealer benefits by reducing its transaction fees.
- First, orders with the same broker number will always match first. Therefore, when a client chooses to “give up” a certain dealer in MATCHNow®, the client’s order stands shoulder-to-shoulder, gaining front-row access to all the orders, firm-wide, that flash through MATCHNow®. This enables the client to directly participate with a dealer’s retail or algo flow, for example.
- Second, because MATCHNow® is a broker-neutral marketplace, clients can give up any number of dealers through MATCHNow®. Clients maintain control of how they distribute their commission dollars.
- Additionally, MATCHNow® is the only marketplace in Canada based on Pro-Rata which benefits institutional clients by rewarding size.
MATCHNow’s Offering At The Quote TradingHow can MATCHNow® trade securities at-the-quote?
The dark rules that changed in October 2012 permit large active orders to trade with dark orders at the CBBO (or “at-the-quote”). For example, a large active buy order can trade against a passive dark order at the Canadian Best Offer.
MATCHNow® uses the IIROC definition of ‘large order’, which means that the active order must be greater than 50 Standard Trading Units (for stocks greater than $1.00 this is 5,000 shares) or if the value of the order is greater than $100,000 CAD.
The dark rules do not require the passive dark order to be large but MATCHNow® decided that it was only fair that both sides should have the same size restrictions to ensure that the active order has the opportunity to receive a reasonable amount of volume when trading at-the-quote. The passive dark order is validated on entry and any time it is amended. Passive dark orders can receive partial fills that bring the volume below the size threshold up until they are completed.
Yes, all orders will trade first with midpoint price improvement until midpoint liquidity is exhausted, then minimal price improvement and finally any remaining amount of the order can trade at-the-quote. The original order size will determine if it can trade against dark passive orders at-the-quote. Two examples to illustrate:
Example 1 XYZ CBBO bid 10 offered 10.05 (mid-point is 10.025 Buy active order for 6,000 shares of XYZ with a price limit of 10.05 (this order qualifies for all levels of price improvement) Sell dark passive order of 1,500 shares of XYZ with a limit of 10 offering midpoint price improvement Sell dark passive order of 7,000 shares of XYZ with a limit of 10.04 only willing to trade at the Canadian Best Offer Two fills will be reported back to the buyer: Trade of 1,500 at 10.025 (midpoint) Trade of 4,500 at 10.05 (Canadian Best Offer) Total trade executed 6,000 at an average price of $10.04375 After this trade 2,500 shares remain selling passively in the dark but only willing to trade at the Canadian Best Offer. If this order is not amended it remains eligible to trade at-the-quote.
Example 2 XYZ CBBO bid 10 offered 10.05 (midpoint is 10.025 A second buy active order for 10,000 shares of XYZ with a limit price of 10.05 (this order qualifies for all levels of price improvement). Sell dark passive order of 2,500 is still resting at a limit price of 10.04 to trade atthe-quote. One fill will be reported back to the buyer Trade of 2,500 at 10.05 (Canadian Best Offer) The buyer will route the remaining 7,500 shares with a limit of 10.05 to another marketplace as designated by their smart order router.
|Stock Price||Trading Fee|
|Under $1||$0.0001 / share / side|
|$1 and over||$0.0002 / share / side|
At-the-quote order types can be configured on a per order basis via Fix Tag 6005 Our latest Fix Spec. has detailed information on this.
At-the-quote Order types can also be set as default at Trader ID level
MATCHNow’s Offering Trading Odd Lots in the DarkWhat has changed with MATCHNow® and odd lots?
Starting on Monday March 2, 2015 MATCHNow® will no longer reject the odd lot portion of mixed lot orders. In the past, only the board lot portion of the mixed lot was eligible to trade and the odd lot was rejected back to the smart order router in the Marketflow connection.
Participants seeking to execute mixed or odd lots will route those active orders to the regular MATCHNow® Marketflow destination. MATCHNow® will automatically parse the odd lots and send them to the MATCHNow® Odd Lot Order Book.
Odd lots or the odd lot portion of a mixed lot order will now be routed to the MATCHNow® odd lot book to buy at the Canadian Best Offer or Sell at the Canadian Best Bid (CBBO).
No. MATCHNow® is offering a competitive solution where multiple liquidity providers can provide liquidity that only trades with active odd lot orders coming through the Marketflow connection. These Odd Lot Liquidity Providers (OLLP) have no obligations, assigned symbols or liquidity goals set by TriAct. There is no restriction on who can be an OLLP or when they want to start providing liquidity to odd lot orders.
Odd Lot Liquidity Providers (OLLP) will need a new order entry connection to the new odd lot Destination. The new odd lot destination accepts Day Orders only. OLLP orders must be >= round lot size minus 1 at all times. (1 share less than board lot size, e.g. 99, 499, 999 is OK)
No. Only mixed/odd Lot Market Flow (IOC) Orders can interact against odd lot passive flow. What happens if I send an order different from a round lot minus 1? An OLLP order will be rejected if it is less than the round lot size minus 1 (e.g. 98, 498, 998 shares). An order dropping below the round lot size shares minus 1 will be returned back as “Nothing Done.”
One TraderID can submit one buy and one sell supplier order per ticker at any moment in time. OLLP orders can be corrected or cancelled. (Corrected orders do not lose priority.)
|Market Flow (Active)||Free|
|Odd Lot (Passive)||Free|
Mixed Lots can be sent on regular liquidity providing sessions but the mixed lot portion is not eligible to trade. Only the full board lot can trade. The mixed lot portion will remain open until the full board lot portion gets filled. Any remaining mixed lot portion will be returned “Nothing Done” after a full board lot partial fill. (After one match cycle) Odd lots will get acknowledged but then returned “Nothing Done” on regular Liquidity Providing sessions. These Immediate or Cancel (IOC) Market Flow orders will interact against the resting Day Orders on the New Odd Lot Liquidity Providing Destination.
These participants and their vendors will not need to make any coding changes so long as they are already routing their mixed and or odd lots to MATCHNow®. Please check with your vendor to ensure you can route odd and mixed lots to the MATCHNow® Market Flow destination.
Yes. You can send any amount from round lot size minus 1 share, upwards. i.e. 99+, 499+, 999+ What about sending a CFO to change amount posted passively in the odd lot book? OLLPs can CFO to any size above round lot size minus 1, but if the order drops below round lot size minus 1 share, the order gets cancelled and you have to send a new order. Full board lots sent to the Odd Lot destination will trade the same way as mixed lots: i.e. they will interact against the odd and mixed lot IOC order flow. (Market flow Destination flow)
The order gets cancelled (returned “Nothing Done”). You would need to resubmit. Placing large passive odd lot orders would ensure you would not need to constantly resubmit throughout the day if the order drops below round lot size minus 1.
OLLP orders may have limit prices to protect themselves from wide price movement. We encourage limits to be marketable. Any order that is not tradeable at the time of a match will be put it to the bottom of the ranking so the active order can check the next order
New Orders are ranked in order of arrival time when submitted after market open at 9:30 am. CFO’d orders maintain priority in the queue. If a limit order is not marketable at the time of a match, the matcher will skip that odd lot liquidity order and put it to the bottom of the ranking. Pre-Open: For orders entered before the open at 09:30am, order is randomized at the open.