A new equity marketplace, CIX Trading Inc., seeks to introduce extended stock trading hours in Canada, but the Toronto Stock Exchange cautions that the proposal threatens market stability and integrity.
CIX’s Ambitious Proposal
CIX Trading Inc., led by industry veteran Jeff Foster, plans to enable trading of Canadian stocks from 7 a.m. ET to 8 p.m. ET, extending beyond the current 9:30 a.m. to 4 p.m. ET window. The platform also aims to offer fractional share trading, allowing investors to purchase precise amounts, such as 6.25 shares for a $500 investment in an $80 stock.
The company’s application for an alternative trading system (ATS) nears final regulatory approval from the Ontario Securities Commission, with operations potentially launching in three to four months.
TMX Group’s Strong Opposition
TMX Group Ltd., parent of the TSX and TSX Venture Exchange, submitted a letter to regulators highlighting “profoundly disruptive consequences” if CIX proceeds. The company argues that approving these features would trigger widespread market structure changes without adequate preparation.
“Any implementation of such fundamental changes must be preceded by a commercially reasonable lead time to mitigate systemic risk and ensure the operational readiness of all stakeholders,” the letter states. “Failure to do so may have profoundly disruptive consequences for the stability and integrity of the Canadian capital markets.”
TMX urges a rigorous cost-benefit analysis and multistakeholder consultation before approval, suggesting CIX launch basic operations first and add features later.
Leaders Clash on Innovation vs. Stability
Jeff Foster accuses TMX of using scare tactics to delay competition. “It is delay, delay, delay and fearmongering,” Foster says. “This speaks to just how far away they are from being able to do the same things we can do today.”
TMX CEO John McKenzie counters that his firm could extend hours immediately but prioritizes industry-wide impacts. “We could turn the market on until 8 o’clock or 12 o’clock or whatever you want tomorrow, but I would have an industry yelling at us for doing that,” McKenzie states. “The heart of our response is that the rules of the game need to be thoughtful of industry impacts across the board.”
McKenzie compares the shift to historical decimalization, insisting changes must occur across all venues. He notes CIX’s initial “unprotected” status—requiring brokers to opt-in—could exacerbate integrity issues during extended hours when companies release information.
Market Context and Competition
Canada features 18 marketplaces across five owners for trading TSX-listed stocks, with TMX handling less than half the volume. CIX’s launch would raise this to 21 venues. No current platforms offer extended hours or fractional trading, potentially funneling activity to CIX’s three venues.
The Canadian Securities Exchange echoes concerns, calling fractional trading “the most problematic aspect,” akin to derivatives needing clearer definitions.
Broad Industry Support with Caveats
Major banks and firms largely back CIX. Wealthsimple commends the effort to close Canada’s “innovation gap.” Toronto-Dominion Bank views the features as a “positive advancement” if implemented thoughtfully.
Royal Bank of Canada and Bank of Montreal express support, while Bank of Nova Scotia praises the “refreshing departure” but recommends phased rollout for adaptation.
McKenzie emphasizes responsible innovation: “Our responsibility is running reputable markets with high availability and reliability. Market structure changes should not be driven by applications for marketplace number 21 that hasn’t done anything yet.”
