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Letter Summary:
While the additional complexity may be offset by increased/recaptured order flow to Canada (what we believe may be the impetus for the proposal and related Alpha order types), the Proposed Amendments could in fact result in lesser flow to Canada if U.S. or
foreign-based dealers with order flow originating outside of Canada in interlisted securities do not wish to navigate through the additional Canadian market complexity if Canadian liquidity is too difficult to understand or access (thus reducing overall market liquidity).
Overview of the Council’s Comments:
We do agree that in general OPR should not apply to marketplaces that intentionally impose an order processing delay either systemically or on certain types of participants. While the Proposed Amendments could have the negative consequences set out in our responses to the Questions below, there may not be any other viable alternative given the previous approval of Alpha’s related proposal. We note that further consideration should be given to whether OPR should still apply to marketplaces that may have an embedded, unintentional order processing delay due to, for example, technological restrictions or latency due to physical location.