TSX Market Making Program Guide Responsibilities of Market Makers TMX Group Page 27 o 600 shares are allocated to Market Maker 2 as a Participation fill (60% of 1000 shares) TSX believes that the proportional allocation retains a direct and important balance between obligated liquidity via the MGF and the degree of participation incentive provided to Market Makers. If the Market Maker has a booked order with time priority over all other booked orders at that price level, the incoming order trades against that booked Market Maker order at that price level. In cases where there are still remaining allocated Participation shares after the booked order has been filled, the Market Maker receives a separate fill for the remaining Participation shares, thereby getting its full allocated Participation shares. 3.5.2 Participation Option Participation Option is a feature that allows Market Makers to determine the size of the order that they will participate with when they have participation ON and the other market maker has participation OFF. This can be set on a symbol basis, but applies to both buy and sell side. The options are detailed in the table below. Note that when a Market Maker has Participation ON, they may also be called upon to guarantee MGF fills for client orders from MGF-eligible Trader IDs marked MGF-NO. The size of these orders depends on the Participation Option chosen (1 & 2 – Total MGF size, 3 – Individual MGF size). If there is only one Market Maker with Participation ON, the size of the MGF fill is limited to the Individual MGF size of the Market Maker that has Participation ON only. Table 5: Participation Options Option Size of incoming order that can be participated with % of incoming order that can be participated with Example: RT1 MGF = 500 (ON); RT2 MGF = 1500 (OFF); Total MGF = 2,000 1 Total MGF size Total MGF Size, capped at the Individual MGF size Participate with all orders ≤ 2000 shares Participation Fill = lesser of (40% of 2,000 = 800, and Individual MGF Size = 500) = 500 shares 2 Total MGF size Individual MGF Size Participate with all orders ≤ 2000 shares Participation Fill = 40% of 500 = 200 3 Individual MGF size Individual MGF Size Participate with all orders ≤ 500 shares Participation Fill = 40% of 500 = 200
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