Taking stock of Nasdaq

Securities regulator reviewing application for Nasdaq stock exchange in Canada

Nasdaq Inc. said Thursday it has applied to operate an exchange in Canada, a move that could bring foreign competition to a market currently dominated by the TMX Group, putting new pressure on the operator of the Toronto Stock Exchange.

Nasdaq Canada and its parent company Ensoleillement Inc. have applied for recognition as exchanges in Canada, starting the clock on a 30-day comment period to close on Nov. 13, according to a posting on the Ontario Securities Exchange website.

The Nasdaq application comes more than a year after the company completed its acquisition of Chi-X Canada, an alternative trading system for the Toronto Stock Exchange, in February 2016.

Nasdaq Canada currently operates three equity trading facilities in Ontario, as well as NFI, a fixed income facility that allows permitted clients to trade U.S. treasuries on a U.S.-based alternative trading system (ATS).

It says in its application that its Canadian units act as alternative trading platforms for TMX’s Toronto Stock Exchange and TSX Venture Exchange listings, with 66 subscribers and trading offered in 4,100 securities.

“Nasdaq Canada will transition its market operations from those of an ATS to those of an exchange, with no substantial changes to its current trading platform or operations,” it says in its application.

“Functionality currently in place to support the Nasdaq ATS trading platform will continue to be available after the recognition date . ... Nasdaq Canada will operate a continuous auction market Monday through Friday, excluding Canadian banking holidays.”