19 Section 3 Products & Order Features 3.1 TSX DRK TSX DRK is a dark pool with deep liquidity and rich functionality, offering fully hidden orders and features on TSX and TSXV-listed securities, and is uniquely integrated with the TSX and TSXV displayed order books, Canada’s deepest pool of visible liquidity. TSX DRK offers a variety of unique features to accommodate a wide range of dark strategies, including more efficient dark active sweeping strategies to help facilitate best execution at reduced costs, and mechanisms to control the environment under which a trade is executed to help minimize information leakage. • Posting orders on TSX DRK facilitates continuous access to both orders expressly seeking dark price-improving liquidity and orders otherwise seeking interaction with Canada’s deepest displayed order book, providing increased fill opportunities. • Liquidity takers can find significant value through meaningful price improvement and reduced trading costs. All TSX DRK functionality is available on both TSX and TSX Venture listed symbols. 3.1.1 TSX DRK Trading on TSX and TSXV TSX DRK currently offers dark limit and pegged order types, Seek Dark Liquidity® (SDL®) orders that specifically target dark liquidity, and a Contra Midpoint Only+ (CMO+) facility to allow trading between like-minded investors. This dark functionality is integrated with the displayed order book and can be entered using standard FIX tags applicable to the TSX-FIX order entry protocol. • DRK Midpoint Peg orders will peg to the Protected NBBO midpoint. They will always provide meaningful price improvement of at least a full trading increment unless the Protected NBBO spread is one trading increment. In this case the price improvement provided will be half a trading increment. • DRK Primary Peg orders will peg to the same-side Protected NBBO, and can be entered with an optional aggressive or passive offset. • DRK Market Peg orders will peg to the opposite-side Protected NBBO, but will default to one-tick inside the opposite-side Protected NBBO. Offsets on DRK Market Pegs will be accepted, but can only be passive offsets. • DRK MPI (Minimum Price Improvement) Peg orders are primary peg orders with an offset that is one-tick more aggressive than the Protected NBBO, or that will trade at the midpoint of the Protected NBBO if the spread is one-tick wide. No offsets are permitted on DRK MPI Peg orders. • DRK limit orders will provide meaningful price improvement to small orders however large orders will be eligible to trade against a DRK limit order at the Protected NBBO on TSX/TSXV once all visible volume on TSX/TSXV has been exhausted. • Contra Midpoint Only Plus (CMO+) orders will peg to the Protected NBBO midpoint, and are subject to a randomized 400 to 600 millisecond delay upon entry. CMO+ orders will only execute against other CMO+ orders, with the exception of an optional feature to allow CMO+ orders, on entry, to execute actively against all resting midpoint-eligible dark liquidity. • Seek Dark Liquidity (SDL) is a feature available for use only with orders marked as IOC or FOK. It is intended to be used where seeking to execute a dark only liquidity taking strategy, including where seeking solely to obtain price improvement for a client order. SDL is well suited for use as a dark probe by a smart order router to systematically access low cost, price improving dark liquidity before routing to the available visible book. Users of SDL will have the option of restricting their dark executions to prices that provide price improvement, or can allow for executions against dark resting liquidity at-the-quote, subject to their stated limit price as well as regulatory requirements applicable to at-the-quote dark trading.
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