Regulator reviewing application for Nasdaq in Canada
New York-based 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, operator of the Toronto Stock Exchange.
According to a posting on the Ontario Securities Commission website, Nasdaq Canada and its parent company, En-soleillement Inc., have applied for recognition as exchanges in Canada, starting the clock on a 30-day comment period to close Nov. 13.
Nasdaq is not currently proposing to list issuers’ securities and, if it decides to do so later, the OSC said its listing rules would have to be reviewed, published for comment and presented to the commission for approval.
Chi-X Canada, an alternative trading system for the Toronto Stock Exchange, was purchased by Nasdaq in February 2016. Applying for an exchange licence was the next “logical step” for Nasdaq after completing technology migration to Chi-X, spokesman Joe Christinat said in an email.
He wouldn’t say when or if the company will start listing securities but said it is talking to clients about their needs. Asked what kinds of securities Nasdaq might go after, he said it lists many asset classes including equities, derivatives, futures, commodities and structured products.
Nasdaq Canada currently operates equity trading facilities in Ontario as alternative trading systems 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 OSC application.
Richard Carleton, CEO of the alternative Canadian Securities Exchange — one of the few existing competitors to the TSX — said he doesn’t think much will change in the short term because Nasdaq is not initially applying to provide listing services.
“They are a well-respected international exchange operator; as time goes on we would expect to see an even more competitive market,” he said in an email on Thursday.