There are a variety of marketplaces on which orders to trade listed securities can be placed and executed. National Bank Direct Brokerage (NBDB) provides this guidance to inform clients about the types of orders offered by NBDB and how such orders will be handled.
All of National Bank Direct Brokerage’s trades are processed through National Bank Financial (NBF). Since 2006 Alternative Trading Systems (“ATS”) have operated in Canada, providing an alternative marketplace for the trading of securities. A multiple market environment brings many benefits to investors such as the potential for improved pricing and liquidity as well as technological and market structure innovation. However it also brings a certain level of complexity and challenges that were not present in a single market environment. Under Canadian regulation, NBF has an obligation to secure the best execution for its client orders. To do so, NBF employs certain automated systems coupled with its understanding and expertise in trading and market structure.
During regular market hours NBF achieves best execution by using automated systems that will source the best execution of a client order from the multiple Canadian and U.S marketplaces. All available visible markets are considered during the sourcing process and may include markets that offer no pre-trade transparency (Dark Pools).
Orders on Canadian inter-listed securities could be sent to a U.S marketplace to provide best execution.
Hours of Operation for Trading in Listed Canadian Securities
Hours of Operation
Most Exchanges and ATS in Canada offer trading between the hours of 9:30 a.m. and 4:00 p.m., Eastern Standard Time ("EST"), Monday through Friday, not including statutory Canadian holidays. Client orders placed during normal business hours will be transmitted to the NBF trading staff or trading systems and executed based on the instructions of the client and in accordance with the hours of operation on the market where the order is placed.
Clients who place orders over the phone, with an NBDB representative or through on-line systems when Canadian markets are closed should be aware that such orders will be held by NBF until the opening of trading the following business day and entered into a market place in the manner described in this document.
Extended Hours Trading
Some marketplaces provide additional order execution facilities outside of their normal trading hours. Clients should consult the web sites of the marketplace where they intend to trade or communicate with NBDB if they wish to execute outside of normal business hours. Please be advised that price determination and liquidity may vary from market to market during these trading sessions.
Standard Handling of Orders
Marketplaces typically operate according to a schedule of trading sessions or market states. The following points are intended to clarify how NBF will process the described client orders during these sessions.
For marketplaces that support an opening auction, e.g. TSX, TSXV, Alpha and Pure trade allocation and imbalance/price volatility management methodology may differ. Markets that do not support an opening auction typically open “shotgun” style at a predetermined time. Please consult each specific marketplace for more information.
Post-open/ Continuous Auction
Where markets support an opening auction, unfilled orders from the auction will rollover to the Post-open market session of the market that they were entered on.
Market and Limit orders received by NBF during the Post-open session will be sent through an automated system that will route the order to the best market available at the time of receipt. Any unfilled portion of the order will be directed by NBF to the marketplace, which in its judgment, provides the best execution possibility and will remain on that market until the order is filled, modified, cancelled or expires.
Orders received after 4 p.m.
Typically held for transmission until the next day, these orders may be entered on a marketplace that has after-hour trading if specifically directed per client instructions. You must contact one of our representatives by telephone to participate in extended trading hours.
In a multiple marketplace environment, certain types of orders may have specific handling implications. Unless otherwise specified, orders will be handled in accordance with the description provided in this document.
A market order is an order to buy or sell a security at whatever prices are available in a marketplace to help ensure a complete and full fill. NBDB cautions clients from entering market orders given the different treatment that market orders receive in a multiple market environment. NBF will route market orders through its automated system that examines each available marketplace and enters the order in the market that secures the best price.
A limit order is an order for a security at a specific minimum sale price or a maximum purchase price set by the client. If a limit order is not immediately executable, NBF will route this order to the marketplace, which in its judgment, provides the best execution possibility. These orders will remain in that market until the order is filled, cancelled or expired.
In a multiple market environment, Clients should be aware that once their limit order is booked on a market place it is possible for the security to trade in other markets without the client’s booked order participating.
Duration refers to the lifespan of the order within a trading system. Different markets may offer different duration values and options. For market specific details please refer to the web site of the market in question. Below are a number of the most commonly used duration types.
A Day order instructs the receiving marketplace to automatically expire the order if it is not executed in the same trading day.
Good Till Date Orders
Good Till Date Orders (“GTD”) have an order duration that specify that the order remain open until it is either filled or until it expires at a specified date. NBDB will only allow the entry of orders with a 30 calendar day maximum. Special Terms Orders ("STO") STO are orders with special terms which trade on a specific book on regular marketplaces. STO orders will only post to the special terms market on which they are entered. Note that the use of special terms orders can delay or decrease the chance of execution, as the receiving market must ensure the “special terms” of the order are satisfied prior to executing the order.
Disclosure of Marketplace
An order executed on one or more than one marketplace or alternative marketplaces may be reported to the client using a trade confirmation that will generally read "Traded on one or more marketplaces or markets, and may be an average price; details available upon request". Some orders executed on more than one marketplace or ATS in Canada will receive a confirmation listing the transactions on the different marketplaces.
Should you receive such a confirmation, you may contact one of our representatives to secure full details of the order execution for all purchases/sales done to complete your order.