TMX Equity Trading Notice

TMX Equities Announces TSX ETF Market Maker Updated Tier B Credit Criteria and New TSX ETF Market Maker Tier A Bonus Incentive Pool

In order to continue to support our valued TSX ETF Market Maker community, and the entire ETF ecosystem in general, while ensuring the highest possible TSX ETF market quality, Toronto Stock Exchange ("TSX") is pleased to announce the following proposed changes to the TSX ETF Market Maker incentive program:

1. Updates to the existing TSX ETF Market Maker Tier B fixed credit reward criteria, and
2. Introduction of a new TSX ETF Market Maker Tier A Bonus incentive pool.

The proposed amendments will be implemented on February 1, 2023, subject to regulatory approval.

1. Updated TSX ETF Market Maker Tier B Credit Criteria

The Tier B fixed credit was introduced in 2012 with the intention of supporting our TSX ETF Market Makers in providing high levels of market quality on less liquid issues, and TSX remains committed to ensuring this support continues. At the same time the Canadian market landscape has changed considerably and the importance of an ETF Market Makers obligation to monitor and ensure the TSX market is competitive with other marketplaces has only increased.

Accordingly, TSX is proposing to: (i) introduce a new TSX Minimum % Time at NBBO criteria for the TSX ETF Market Maker monthly Tier B credit¹, being 90%; and (ii) reset the TSX ETF Market Maker monthly performance score required on a Tier B symbol to receive the Tier B credit, which was temporarily adjusted to 40% in March 2020 during the Covid pandemic, to the original 60%. No changes to the existing Tier B credits available are being made as a result of the updates to the Tier B credit criteria.

2. TSX ETF Market Maker Tier A Bonus Incentive Pool

TSX is also proposing to introduce a new TSX ETF Market Maker Tier A bonus incentive pool (the "Tier A Bonus"), which will be calculated monthly and will be available based on the unpaid amounts of the total available Tier B credit pool (if any) (ie. the difference between the total Tier B Credit available and the total Tier B Credit paid). The allocation of the Tier A Bonus will be based on the total number of points each TSX ETF Market Maker will receive across all of its Tier A assignments based on certain criteria as set out in the table below.

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¹TSX corporate equities Market Maker program already incorporates a specific TSX minimum % time at NBBO obligation in monthly performance results used to determine qualification for Tier B credit.

A TSX ETF Market Maker's percentage of the total amount of points awarded to all TSX ETF Market Makers across all TSX ETF Tier A assignments will determine their percentage payout. For example, where there is $20,000 in the Total TSX ETF Tier A Bonus Pool for a particular month (based on the unearned Tier B credits for the same month), and where:

(a) MM #1 earned 1000 points across their Tier A assignments;
(b) MM #2 earned 200 points across their Tier A assignments; and
(c) MM #3 earned 800 points across their Tier A assignments;

then the following would apply:

(a) MM #1 earns 50% (or $10,000) of the Tier A Bonus Pool;
(b) MM #2 earns 10% (or $2,000) of the Tier A Bonus Pool; and
(c) MM #3 earns 40% (or $8,000) of the Tier A Bonus Pool.

An updated fee schedule to reflect the proposed amendments will be available here on February 1, 2023.

For more information regarding this notice, please contact your TSX Account Manager.