TMX Group has announced the launch of AlphaX US, a new Alternative Trading System (ATS) venue designed to enhance execution quality for US-listed securities. This marks the first international expansion for TMX Group’s Markets division beyond Canada.
AlphaX US will exclusively trade securities governed by Reg NMS, including common stocks, exchange-traded funds, and American depository receipts. Access to the platform will be limited to FINRA-registered broker-dealers.
Heidi Fischer, President, TSX AlphaX US, explains to TradingTech Insight the background behind the launch of the new venue: “TMX Group’s expertise in Canada has always centred around improving markets and enhancing execution quality, and that focus was integral to our approach in launching AlphaX US,” she says. “While the U.S. ATS landscape has many diverse types of venues, there is a smaller but growing segment of newer, standalone ATS platforms dedicated to execution quality and innovation. This segment has expanded significantly in recent years, and TMX Group sees it as a growth area that will continue to evolve. With AlphaX US, the goal is not simply to serve as an addition but to complement this space by introducing a unique venue with its own innovations, appealing to both our sell-side participants and their buy-side clients.”
Positioned as a high-performance trading venue, AlphaX US combines innovative functionality with ease of use, offering customisable options, seamless implementation, and advanced analytics to the broker-dealer community. The system is designed to support execution performance with features tailored to market participants’ needs.
“When designing AlphaX US, we focused on two key goals: enhancing execution quality and fostering seamless partnerships with participants,” says Fischer. “We wanted to create a platform that’s easy to implement, requiring minimal infrastructure changes, while also offering customisation options for sell-side participants.”
She continues: “AlphaX US is a periodic auction venue with frequent auctions that closely mimic continuous trading. What sets us apart is the integration of counterparty selection and segmentation within the auction model. Additionally, we’ve innovated on execution pricing. Instead of settling matches at a single price or the NBBO midpoint, we price at the midpoint of the buyer’s and seller’s prices. This approach provides greater price improvement opportunities and maximises execution for all possible shares within an event.
Fischer explains that the AlphaX Hub, a GUI allowing participants to set up parameter trees for routing preferences, has been introduced to streamline order management. “This reduces the need for frequent order cancellations and re-entries,” she says. “Participants can also configure interactions akin to private or hosted rooms but within our main venue. Our methodology prioritises price/time and ensures trades are executed at the best price, blending private interactions with broader market dynamics for optimal outcomes.”
Trading on AlphaX US will align with US equity market hours and holiday schedules, with order entry available 60 minutes prior to market open and continuing throughout the trading day.
Subscribe to our newsletter
