The role of a Market Maker is to enhance liquidity, improve market quality with respect to price discovery, and provide liquidity to fill specific order types. The Market Maker achieves this by ensuring that there is a continuous two-sided market with a consistently narrow spread for their securities of responsibility; posting orders as necessary to meet these goals. The liquidity for specific order types is provided by Market Makers committing to a guaranteed minimum fill at the bid or offer for qualifying client orders and through the provision of automated execution for tradable odd lot orders. All issues traded on the CSE are available to be assigned to an interested Market Maker.
The CSE Appointed Market Maker
- Ensures a two-sided market during primary market continuous trading, and at the opening match for CSE listed on their assigned securities.
- Ensures a spread is maintained that satisfies a goal set at the time of the application.
- Provides additional liquidity to the retail trading community with an automated guaranteed minimum fill facility.
- Ensure that their assigned securities have volume at the national best bid and offer for a defined amount of time each day.
- Provides additional liquidity to assist in filling tradable odd-lots through an automated odd-lot execution facility.
- Reports trading irregularities to the CSE and IIROC to ensure an orderly trading environment.
CSE Market Makers are expected to adhere to their committed performance metrics. The CSE monitors Market Maker performance on the following criteria:
- Spread - Measures the Market Maker's success in ensuring spread goals
- Quote presence - Measures Market Maker's success in meeting the two sided market goals
- Additional liquidity - Measures Market Maker's success in maintaining the agreed upon minimum guaranteed fill obligation and for maintaining the automated odd-lot fill obligation
- Dealers’ past performance in volume of liquidity provided at the National Best Bid and/or the National Best Offer on assigned securities
How Securities Are Allocated
The CSE awards market making assignments by evaluating the following:
- Dealers’ commitment to offer a competitive two-sided market
- Dealers’ anticipated ability to meet the quote presence, spread and minimum guaranteed fill commitments established in their application
- Dealers' past performance in meeting the quote presence, spread and minimum guaranteed fill commitments established in their applications for previously assigned securities
- Specific requests from issuers
- Dealers’ prominence in the given sector
Market Maker Application Procedures
The CSE Market Maker Application form must be completed in full. For applications covering multiple securities, an appendix may accompany the form indicating the guaranteed fill volume and spread goal for each security. The form may be accessed at: Forms
Applications may be delivered by fax, email, or directly delivered to the offices of the Exchange. Contact information is provided below.
First Canadian Place, 100 King Street West, Suite 7210 | Toronto | ON | Canada | M5X 1E1
Applications received during a business week will be reviewed by the CSE on the following Tuesday. Applicants will be notified of the decision by the next business day. Allocations will be announced in an Exchange Bulletin within two business days of the decision, with an effective date no later than the following week.