Sigma X to Launch in Canada

Terry Flanagan

Goldman Sachs Electronic Trading, the trading platform unit of investment banking giant Goldman Sachs, has announced that it will launch its Sigma X alternative trading system in Canada, which will be the fourth market the dark pool operates in.

“There is significant demand from our clients to cross and anonymously seek out unique liquidity,” said Todd Lopez, managing director and co-head of Americas sales at Goldman Sachs Electronic Trading. “We know the uptake of non-displayed liquidity in Canada is somewhat muted to date, but we anticipate that changing over time.”

Although the company doesn’t have a specific timeframe for when Sigma X Canada will launch, Lopez estimates that it will debut before the end of September. At launch, the platform will only accept orders of securities listed on the TSX.

The move to bring Sigma X to Canada comes in the face of increasing regulatory scrutiny for dark pools in the nation, with agencies including the Investment Industry Regulatory Organization of Canada and the Ontario Securities Commission looking to impose certain guidelines to reign in such ATSs.

“Absolutely, we are watching the regulatory landscape quite closely,” said Lopez. “We are confident that whatever direction the regulators decide to move in, our ATS technology is flexible and scalable and will be able to adapt.”

“We’re very committed to Canada,” said Lopez. “In addition to the launch of the ATS, we’ve also built a lot of infrastructure locally in Canada where we will house our routing technology.”

Although Goldman remains reserved as to whether or not Sigma X Canada will experience the same success of its stateside counterpart, it remains confident that there is a growing demand for its trading services. “Global clients have expressed interest in utilizing these tools as they seek liquidity,” said Lopez.

Debuting in 2005, Sigma X is currently second in U.S. market share among dark pools, trailing only Credit Suisse’s Crossfinder ATS, according to Rosenblatt Securities. The Sigma X platform is also available to investors in Europe and Japan.

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