National Bank of Canada embraces Orc algos
The National Bank of Canada is to use algorithmic trading tools and market access from Nordic technology company Orc, through its subsidiary National Bank Financial.
NBF will provide customers with trading tools, execution algorithms and direct market access to trade Canadian equities, options and futures. The company is also joining Orc ExNet, which is a private IP network that provides access to additional markets without the customer having to obtain its own exchange membership.
Based in Montreal, Quebec, the National Bank of Canada uses its National Bank Financial Markets subsidiary to serve corporations, institutional investors and government entities while its National Bank Financial Wealth Management arm handles individual investors.
“Investors around the world are increasingly looking to Canada to diversify away from markets where they have historically concentrated their holdings,” said Robert Fotheringham,” senior vice president, trading for the Toronto Stock Exchange. “They see Canada as a great alternative that offers diversification by geography and industry sector; they also have confidence in the Canadian dollar, our country’s fundamentals and the stability providing by the Canadian government.”
The Canadian securities markets have seen significant changes in recent months. The acquisition by Maple of TMX and Alpha Group together with the Canadian Depository for Securities in August brought an end to a period of fragmentation between multiple trading venues. Alternative trading system Chi-X Canada is now the only major independent competitor left standing in the market.
Meanwhile, new rules will require market participants in Canada to have pre-trade risk controls in place across all asset classes from next month. Under rule NI 23-103 Electronic Trading, market participants must establish, maintain and ensure compliance with risk management and supervisory controls that are reasonably designed to manage the financial, regulatory and other risks associated with marketplace access. The new legislation is in part a response to the flash crash of May 2010, in which $1 trillion was briefly wiped off the value of the US stock market due to an erroneously entered algorithmic order.