Alpha ATS LP: Notice of Proposed Changes

Market Regulation Document Type
Alpha ATS rule review and notices

ALPHA ATS LP
NOTICE OF PROPOSED CHANGES


Alpha ATS LP has announced its plans to implement the changes described below in March 2010. It is publishing this Notice of Proposed Changes in accordance with the requirements set out in OSC Staff Notice 21-703. A Subscriber Notice has also been published and is available at www.alphatradingsystems.ca. (See Subscriber Notice 2010 -0001).

Any questions regarding these changes should be addressed to Randee Pavalow, Head of Operations and Regulatory Matters:

[email protected]
t: 647-259-0420



Description of Proposed Changes and Reasons for Changes

Passive Only Order Type
Alpha plans to introduce the Passive Only Order Type. A Passive Only order is described as an order that is cancelled at the time of entry if any portion of the order is immediately tradable. The reason for this new order type is to address subscriber demand.

Acceptance of Odd Lot Orders on Exchange Listed Debt Instruments

Alpha ATS will not be providing Odd Lot assignments to exchange listed debt instruments. This change was made on a temporary basis to assist Odd Lot Dealers in managing specific risks related to exchange traded debt instruments. The unique standard trading unit size with respect to exchange listed debt poses additional risk to Odd Lot Dealers who have agreed to honor and accept all automatic execution of Odd Lot Orders. We have monitored the application of this change and determined it should be permanent.

Bypass Cross

A bypass cross entered in the extended trading session will be allowed at any price. This change was necessary in order to make the bypass cross functionality consistent with the intended usage of the marker as addressed in the original regulatory filing and policy changes.

Expected Impact of the changes

Passive Only Order Type
Subscribers will be able to enter orders that will be cancelled at the time of entry if any portion of the order is immediately tradable. Passive Only Orders are also cancelled if the order becomes active due to a price change. This new order type offers additional alternatives to traders and investors.

Acceptance of Odd Lot Orders on Exchange Listed Debt Instruments
All odd lot or mixed lot orders for exchange listed debt instruments entered on Alpha ATS will be rejected.

Bypass Cross

Crosses entered in the extended trading session with the bypass marker will execute at any price, which should enable subscribers to enter crosses in compliance with UMIR.

Consultations

Passive Only Order Type
Alpha received requests for this order type from its Subscribers. It also consulted with its User Committee.

Acceptance of Odd Lot Orders on Exchange Listed Debt Instruments
Concerns regarding the Alpha Odd Lot facility specific to Exchange Listed Debt Instruments were raised by the Alpha Odd Lot Dealer Committee

Bypass Cross
Alpha received requests for this from its Subscribers. It also consulted with its User Committee

Current implementation of changes in the Canadian marketplace and any alternatives considered

Passive Only Order Type
This order type is already available on other Canadian Marketplaces. The Passive Only order implementation was selected since it best suited the needs of Alpha Subscribers.

Acceptance of Odd Lot Orders on Exchange Listed Debt Instruments
No alternatives were present to Alpha with regards to this matter.

Bypass Cross
The bypass cross marker is already available on other Canadian Marketplaces. Market places that offer a continuous trading session until 5pm permit the use of the bypass marker over the entire session.