The Canadian Securities Administrators have published final amendments to National Instrument 23-101 Trading Rules, lowering the active trading fee cap for securities listed on both a Canadian recognized exchange and a U.S. registered national securities exchange, defined in the notice as U.S. inter-listed securities.
The amendments modify section 6.6.1 of NI 23-101 to cap active trading fees at CAD $0.0017 per share for any equity security or exchange-traded fund unit with an execution price at or above $1.00, down from the previous cap of $0.0030.
An active trading fee is “the fee applied for executing an order that was entered to execute against a displayed order on a particular marketplace.” Securities priced below $1.00 retain the existing cap of $0.0004 per share.
The amendments follow a review by the CSA and CIRO of U.S. Securities and Exchange Commission amendments establishing a variable minimum trading increment – the SEC Tick Size Rule – and an accompanying reduction in U.S. trading fee caps under the SEC Trading Fee Rule.
The CSA published proposed amendments for comment on January 23, 2025, initially proposing a cap of CAD $0.0010 to match the SEC trading fee cap of USD $0.0010 “without consideration of foreign exchange rates.”
The SEC rules “were originally to come into effect on November 3, 2025 but implementation was paused pending the outcome of litigation challenging the rules” and will now be implemented on November 2, 2026, the same date on which the CSA amendments will come into force, provided all necessary approvals are obtained.
After considering ten responses to the request for comment, the CSA adopted $0.0017 rather than the originally proposed $0.0010. The notice explains that $0.0017 “better approximating the Canadian dollar equivalent of the U.S. fee cap of USD $0.0010 (which is approximately CAD $0.0014 at current exchange rates), reflecting the current foreign exchange rate and providing marketplaces greater flexibility in setting their respective fee schedules.”
The CSA also noted that “there was little consensus among commenters on whether a trading fee cap of $0.0010 per share or alternative fee caps were more appropriate or would be effective in keeping order flow in Canada,” and that “some commenters warned that a $0.0010 cap would make it more difficult for Canadian marketplaces to compete for order flow by offering higher rebates.”
Adopting $0.0017 also simplifies the overall fee structure, as that figure already applied to non-U.S. inter-listed securities, meaning all equities priced at or above $1.00 now fall under a single cap.
Responses were received from BMO Capital Markets, Canadian Independent Finance and Innovation Counsel Inc., Investment Industry Association of Canada, Nasdaq Canada, National Bank Financial Inc., Scotiabank, TD Securities, TMX Group Limited, Tradelogiq Markets Inc., and Virtu Financial.
Five commenters supported the originally proposed $0.0010 cap. One supported eliminating the distinction between U.S. inter-listed and non-inter-listed securities. One supported $0.0025. One supported $0.0030 but indicated willingness to accept $0.0017.
Two supported removing fee caps altogether in favour of a market-driven structure. On competitiveness, two commenters said reducing the Canadian cap “could incentivize Canadian investors and traders to use more U.S. marketplaces where higher rebates can be offered, leading to decreased order flow in Canada.”
The CSA said it “will monitor and continue to monitor how any changes to the trading fee cap impact the competitiveness of the Canadian capital markets.”
The amendments also repeal section 6.6.2 of NI 23-101, which had provided a 35-day transition period for securities ceasing to be inter-listed. With a unified cap now applying to all equities, the provision is no longer required. The companion policy change consists of the deletion of section 6.4.1.
On the question of whether the cap should extend to passive orders on inverted markets, the CSA declined to act, stating the cap “is intended to apply to orders that a marketplace participant may be required to interact with as a result of the order protection rule” and that “no one is required to post a passive order on an inverted market.”
On pre-trade fee transparency, the CSA made no change, noting that “Canada’s marketplaces offer different volume discount programs than exist in the U.S. which result in less frequent routing conflicts in Canada.”
In a related initiative, CIRO published an approval to amend subsection 6.1(1) of the Universal Market Integrity Rules “to align Canadian trading increments for certain U.S. Inter-listed Securities with the equivalent minimum pricing increment for these securities in the U.S.”
