High-speed trading un-Canadian, says NY Times

Sometimes, national niceness wins.

The New York Times has highlighted RBC’s “rather Canadian restraint and prudence” in a discussion of the bank’s anti-high-speed-trading technology and decision not to open a dark pool.

Read: Concerns about high-frequency trading

Yet these moves haven’t dampened RBC’s market share, reports the Times.

“The Canadian bank has become particularly popular with the largest, most sophisticated mutual funds and investors, according to a recent survey by the Tabb Group. Over all, it has risen to become the ninth largest broker for American stocks last year, up from the 18th largest in 2010, according to the brokerage and research firm Abel/Noser.”

Read: RBC, Barclays among backers of new Canadian stock market

Slower trading seems to be a Canadian trait. Yesterday, RBC, Barclays, CI Investments and IGM Financial announced they would open a new Canadian stock exchange, Aequitas Innovations Inc. Its mission is to promote “true and reliable liquidity” to traditional investors that it says are at a disadvantage with current markets that cater to high-volume trading activities to generate revenue.

Read: IIROC needs help with high-speed trading study

And Canadian regulators have also been cautious on dark pool trading. In 2012, IIROC and CSA moved to regulate such orders. The revisions to NI 21-101 and UMIR framework permit IIROC to establish a minimum size threshold for dark orders. The rules also enable institutional traders to execute large orders with minimal market impact, while ensuring that investors with smaller orders receive meaningful price improvement when they trade with dark orders.

Read: CSA, IIROC regulate dark orders

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.