Multiple Marketplaces Trading Policy – February 2007
It is anticipated that Pure Trading (“Pure”) will commence operation in Canada effective March 9, 2007. Pure will be structured as a competitive securities marketplace to the TSX. As of the date that Pure commences operation, orders on TSX listed securities may be executed on either the TSX or Pure. Securities listed on the TSX Venture exchange will not trade on Pure as of yet.
PI Financial Corp. and its affiliates (collectively “PI”) are committed to use all reasonable efforts to ensure that our clients achieve “best execution” of their orders for securities that are quoted or traded on all Canadian marketplaces. The following policies and procedures are intended to govern PI’s trading on multiple marketplaces and may affect the manner in which client trades in Canadian securities are conducted:
1. Default Marketplace
Unless notified otherwise by PI, the default marketplace for all securities listed on the Toronto Stock Exchange (“TSX”), whether or not the security is trading on other alternate marketplaces, will be the TSX. The TSX operates between 9:30 am EST and 4:00 pm EST, Monday through Friday, not including statutory holidays in Ontario. All references to time in this document are references to Eastern Standard Time (including Eastern Daylight Savings Time).
2. Hours of Operation for Trading in Listed Canadian Securities
PI Investment Advisors, trading staff and systems will be available for order execution during default marketplace hours. Staff may be available outside of default marketplace hours; however, PI will not guarantee the ability to take client orders and/or effect trade execution outside of the hours of 9:30 am to 4:00 pm EST.
3. Standard Order Routing Conditions
All orders received for TSX securities will be routed to either the default marketplace or alternative marketplaces as follows:
(a) An order received prior to default marketplace opening (9:30 am EST) will be entered on the default marketplace (TSX) for execution on the opening. Orders received prior to the default marketplace opening will not route to an alternative marketplace;
(b) An order received after the default marketplace close (4:00 pm EST) will be entered to the pre-opening of the default marketplace (TSX) on the following business day. Orders received after the default marketplace close will not route to an alternative marketplace;
(c) An order received during the default marketplace operating hours will be entered into the best market at the time of entry. The “best market” is the marketplace with the best bid (buy price) or ask (sell price) or where PI feels the order has the highest probability of being executed. This may be any marketplace that PI has access to and/or can access for the purpose of best execution;
(d) Any portion of an order that cannot be immediately filled will be entered on the default marketplace (TSX) and will remain in the default marketplace order book until the order is filled, expired, changed or cancelled; and
(e) Changes to an outstanding order, or portion of an outstanding order, will be handled the same as a new order received and will be treated according to routing conditions (c) and (d) above. In other words, it will be entered into the “best market” at the time of the change and then the unfilled balance will be entered on the default marketplace and will remain in the default marketplace order book until the order is filled, expired, changed or cancelled.
4. Order Execution
Certain types of orders have specific handling implications in a multiple marketplace environment as follows:
(a) Day Orders
A Day Order is an order to trade that expires if it is not executed the day that it is booked to the marketplace. Day Orders will be handled in accordance with the “Standard Order Routing Conditions”. All Day Orders expire, if not filled in full, upon the close of the marketplace where the last portion of the order remains effective, unless otherwise agreed to between the client and the Investment Advisor.
(b) Good Til Cancelled (Open) Orders
Open orders are orders that will remain valid until a specified date of expiry. These orders will be entered in the default marketplace (TSX) if they are not immediately executable on an alternative marketplace at the time of entry. The order will remain in the default marketplace until executed or expiry, whichever comes first.
(c) Market Orders
A Market Order is an order to buy or sell a security at whatever prices are available in the marketplace to help ensure a complete and full fill. Upon entry to the marketplace, these orders require immediate completion. Market Orders will be handled in accordance with the “Standard Order Routing Conditions”. These orders will expire, if not filled in full, on the marketplace where the last portion of the order remains live, at the close of the marketplace.
(d) Limit Orders
A Limit Order is an order for a security at a specific minimum sale price or maximum purchase price that is not to be exceeded. Limit Orders will be handled in accordance with the “Standard Order Routing Conditions”. The order will expire, if not filled in full, upon the close of the marketplace where the last portion of the order remains live.
(e) Special Terms Orders
Special Terms Orders are orders with specific terms that are not executable in the regular marketplace. Special Terms Orders will be executed by PI’s trading desk and will only be entered to the Special Terms Market of the default marketplace, unless they are immediately executable on an alternative marketplace at the time of entry. Special Terms Orders will expire at the close of the default marketplace.
(f) Stop Loss Orders
Stop Loss Orders are orders that become limit orders when a board lot is traded at, or superior to, the stop loss price on the marketplace in which the order has been booked. These orders will only be entered in the default marketplace order book, and will remain there until they order is executed or expires, whichever comes first.
5. Extenuating Circumstances
In the event of technical or other issues that limit PI’s access to specific marketplaces, or limit access to routing automation, orders received will be directed to either the default or alternative marketplace as circumstances warrant and as determined at the sole discretion of PI.
6. Disclosure of Marketplace
An order executed on one or more marketplace or alternative marketplace will be reported to the client using separate confirmations for each marketplace on which the order was filled. The marketplace on which the order was filled will be identified by name on the confirmation. Multiple marketplaces may result in the client receiving more confirmation slips than in the past.
7. Amendments
Changes to this policy may be made from time-to-time at the sole discretion of PI. Changes will be posted to PI’s website www.pifinancialcorp.com.
If you any questions or concerns regarding these policies, please contact your Investment Advisor.