Goldman Sachs Launches New Canadian Stock Market
Tuesday, August 23, 2011

Goldman Sachs has entered the Canadian stock exchange market with the launch of a new Alternative Trading System, based on a product first rolled out in the US six years ago.

Goldman Sachs Electronic Trading (GSET) announced on August 18 the establishment of SIGMA X Canada. It will offer access to registered Investment Dealers and their clients to trade Toronto Stock Exchange listed securities.

GSET believes that this new ATS will provide a broad source of Canadian equity liquidity, stressing that it builds on the strength of state-of-the-art matching technology. In addition, through leveraging a diverse subscriber and client base, GSET argues that the liquidity available within the ATS will offer enhanced execution and pricing results.

SIGMA X Canada will anonymously match buyers and sellers and will offer guaranteed price improvement relative to the National Best Bid and Offer (NBBO).

SIGMA X Canada is comprised of a host of liquidity participants, including broker dealers, hedge funds and institutions, in addition to Goldman Sachs liquidity. The matching engine resides in a third-party Toronto data centre.

Commenting on the launch, Todd Lopez, managing director and co-head of Americas sales, GSET, said: “The growth potential of the Canadian equity market is significant. We believe unique, alternative pools of liquidity will continue to play an important role in the Canadian market’s development.”

Adam Mazur, GSET’s managing director and co-head of business development, added: “Since the original launch of SIGMA X in the US in 2005, GSET has established itself as a leading player in non-displayed crossing in major markets around the globe. SIGMA X Canada complements our suite of non-displayed liquidity offerings we currently provide in the Americas, Europe and Asia and is an integral part of our global GSET strategy.”

Such anonymous trading, also know as 'dark pool' liquidy, has come in for criticism from many quarters however, because of the lack of transparency involved.

In addition, the principles would mitigate the effect of any potential fragmentation of information and liquidity by generally promoting the consolidation of such trading information; help to ensure that regulators have access to adequate information to monitor the use of dark pools and dark orders and to enable an appropriate regulatory response to market developments; and mean that market participants have sufficient information so that they are able to understand the manner in which orders will be handled and executed.