CSA Notice 23-322 Trading Fee Rebate Pilot Study

May 24, 2018

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CSA Notice 23-322 Trading Fee Rebate Pilot Study

Letter Summary:

The CSA provided an update on its original proposals to conduct a trading fee rebate pilot study, subsequent to the SEC announcing it would establish a study to look at the impact of transaction fees and rebates on, among other things, order routing behaviour.  In 2014, the CSA had indicated that rebate payments contributed to conflicts of interest and the segmentation of orders, but did not implement a pilot study at the time as a result of the prevalence of inter-listed securities.

Overview of the Council’s Comments:

The council would support a coordinated SEC/CSA transaction fee pilot to study the impact of liquidity incentives (aka exchange rebates) on order routing behavior and overall market quality.