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Instinet Launching New Canadian ATS

Date: Monday, December 4, 2006
Author: Chris Clair, Senior Financial Correspondent, Hedgeworld.com

TORONTO (HedgeWorld.com)—Instinet Inc. said Monday [Dec. 4] that it plans to launch a new alternative trading system for Canadian exchange-listed securities.

The system, called ICX, for Instinet Canada Cross, will function as a continuous electronic auction market. In a news release, Instinet said it plans to launch the system in 2007. ICX will be operated by Instinet I-X Ltd., a Canadian investment dealer whose registration with securities regulators is pending. Pending that approval, Instinet said it expects that ICX will improve price discovery in Canadian equities markets by speeding transactions, providing for more liquidity and lowering transaction costs, all of which will lead to better performance.

"We believe there is a significant opportunity to provide the Canadian marketplace with the same speed and cost benefits that alternative execution venues have brought in recent years to other markets around the world," said Alex Goor, co-president at Instinet, in a statement. "We expect the resulting increase in transaction speed at significantly lower cost to lead to greater trading volumes and a positive impact on market liquidity and transparency."

Tal Cohen, senior vice president at Instinet, added that Instinet's Canadian clients made it clear they wanted fully-electronic, off-exchange sources of liquidity. Alternative trading systems are becoming more popular around the world, as trading moves to electronic venues in search of faster and lower-cost execution.

Instinet's ICX will be available to any investment dealer registered and in good standing with the Investment Dealers Association of Canada. The system will support advanced order types, according to Instinet, and will fully abide by the Universal Market Integrity Rules. Members can access it via the Financial Information Exchange protocol. Market data will be sent out to subscribers via third-party market vendors at no cost, Instinet officials said.