Regulators will analyze trading fee rebate payments if the U.S. moves ahead as well
The Canadian Securities Administrators (CSA) says it will look at the effects of prohibiting marketplace trading fee rebate payments on market participants if the U.S. Securities and Exchange Commission conducts a similar study.
The CSA said the pilot study would apply temporary pricing restrictions on marketplace trading fee rebates payable for transactions in a sample set of securities. The sample securities would include highly liquid and medium liquidity securities.
CSA wants to identify issues dealing with trading fee rebates
The pilot study, initially considered in a 2014 CSA notice, is part of the CSA's plan to identify and address issues concerning trading fee rebates.
"We have heard from our stakeholders that it is important to test how marketplace trading fee rebates affect the behaviour of market participants," said Louis Morisset, CSA chair, president and CEO of the Autorité des marchés financiers. "This study will help us to better understand and address potential issues associated with these rebates."
Should the CSA go forward, it will be in two parts
If the CSA moves ahead, it would do so in two stages. The first would involve interlisted securities in tandem with the SEC Fee Pilot, if possible. The second would take place three months later and would involve non-interlisted securities and exchange-traded products.
The timing and duration of the study would coincide with the SEC Fee Pilot. A subsequent notice with the implementation orders will be published if, and when, the SEC Fee Pilot implementation date is announced.