Scotia iTRADE® Policy on Multiple Marketplace Trading

January 2012

To Scotia iTRADE's Retail Customers

With the availability of multiple marketplaces in Canada, Scotia iTRADE has prepared this policy to inform its retail customers of the manner in which Scotia iTRADE is processing orders, handling certain trade characteristics, and addressing other matters through the Scotia Trading Technologies Network and third party smart order router (SOR) service employed by it.

Scotia iTRADE has been implementing its multiple marketplace initiative in phases, introducing access to its SOR service and alternative marketplaces through staged implementations. Scotia iTRADE will notify you as and when it introduces each phase of this implementation.

Unless otherwise indicated, this policy applies to orders entered through the Scotia iTRADE website, Scotia iTRADE MarketTraderTM, Scotia iTRADE ProTM and orders sent via the Scotia iTRADE Customer Service Desk.

This policy may change from time to time, depending on such factors as activity levels in the respective marketplaces and customer demand. Scotia iTRADE will endeavor to inform you regarding any changes. If you have any questions regarding this policy, please contact the Scotia iTRADE Customer Service Desk.

1. Principal, Alternate and Default Marketplaces

For trading on multiple marketplaces in 2009 and until further notice, the Principal Marketplace (as defined by securities regulatory authorities) for securities listed for trading on the Toronto Stock Exchange ("TSX") or Toronto Venture Exchange ("TSX-V") will be the TSX and TSX-V, respectively. References in this policy to the Principal Marketplace are intended at this time to be to the TSX and TSX-V. References to the alternate marketplace(s) are intended at this time to be to PURE and Alpha.

The TSX, TSX-V and Alpha operate between 9:30 am (Toronto local time) and 4:00 pm (Toronto local time), Monday through Friday, not including statutory Canadian holidays, with the TSX and Alpha offering extended hours from 4:15 pm to 5:00 pm. PURE operates between the hours of 9:00 am (Toronto local time) and 5:00 pm (Toronto local time). All references to time in this document are references to Toronto local time which is Eastern Standard Time or Eastern Daylight Savings Time when in effect.

Unless notified otherwise by Scotia iTRADE, the "default" marketplace for all orders for securities listed on the TSX or TSX-V, whether or not the security is trading on other marketplaces, will be the TSX and TSX-V, respectively.

2. Hours of Operation for Trading in Listed Canadian Securities

The Scotia iTRADE Customer Service Desk will be available for order execution during Principal Marketplace hours (including extended hours). Orders may be placed electronically through: (i) the Scotia iTRADE website and Scotia iTRADE MarketTrader 24 hours-a-day, and (ii) Scotia iTRADE Pro during Principal Marketplace hours (excluding extended hours).

3. Standard Handling of Orders

The following (the "Standard Handling of Orders") applies to orders routed through Scotia iTRADE's SOR service:

  • an order received prior to 9:30 am will be booked to the pre-opening of the Principal Marketplace (currently the TSX or TSX-V) for execution on the opening;

  • an order other than an order entered through Scotia iTRADE Pro (which is handled in accordance with (iii) below) that is received after 5:00 p.m. will be entered the next business day to the pre-opening of the Principal Marketplace (currently the TSX or TSX-V);

  • orders entered through Scotia iTRADE Pro that are received after 4:00 p.m. will be rejected and will need to be re-entered by the client the next business day;

  • in respect of an immediately executable order received after the opening of the Principal Marketplace and prior to 5:00 pm (4:00 pm for Scotia iTRADE Pro orders), Scotia iTRADE will make reasonable efforts to enter the order into the marketplace with the "best price" at the time of order entry ("trade-through protection"). This may involve routing the order between marketplaces to fill the portions of the order that are tradable at the time of order entry at the prevailing "best price". The marketplace with the "best price" is the marketplace that is accessible through the Scotia Trading Technologies Network, provides pre-trade transparency, is fully automated, supports all attributes of the order, and at the time of order entry has the best bid (buy price) or ask (sell price) for the security being traded;

  • any portion of an order that cannot be immediately filled will be booked to the default marketplace (at this time the TSX and TSX-V) and will remain in that marketplace until the order is filled, expired, changed or cancelled;

  • if an order booked to the default marketplace (at this time the TSX and TSX-V) is changed, Scotia iTRADE will make reasonable efforts to seek the marketplace with the "best price" at the time the order is changed.

4. Order Execution

Certain types of orders have specific handling implications in a multiple marketplace environment. These have been addressed as set forth below:

  • Day Orders
    A Day Order is an order to trade that expires if it is not executed the day that it is booked to the marketplace. Day orders will be handled in accordance with the "Standard Handling of Orders". All Day Orders expire, if not filled in full, at the end of the continuous trading session of the Principal Marketplace (4:00 pm on each of the TSX and TSX-V).

  • Good Til Date Orders
    Good Til Date ("GTD") orders are orders that will remain open until a specified date of expiry. These orders will be handled in accordance with the "Standard Handling of Orders". The balance of any unfilled GTD order will remain in the default marketplace until the order is executed, changed, cancelled, or expiry, whichever occurs first. GTD orders expire at 5:00 pm on the TSX and 4:00 pm on the TSX-V on the expiry date specified in the client's order. Changed GTD orders will be handled as described below.

    If a GTD order that is booked to the Principal Marketplace (the TSX or TSX-V) as described above is changed, Scotia iTRADE will make reasonable efforts to seek the marketplace with the "best price" at the time the order is changed. Any unfilled portion will be booked as a new order on the default marketplace, the TSX or TSX-V. The GTD order will expire on the specified date of expiry.

  • Market Orders
    A Market Order is an order to buy or sell a security at whatever price is available in the marketplace. These orders will be filled in accordance with the "Standard Handling of Orders". .

  • Limit Orders
    A Limit Order is an order for a security at a specific minimum sale price or maximum purchase price. These orders will be filled in accordance with the "Standard Handling of Orders". .

  • Special Terms
    Special terms orders are orders with special terms that are not executable in the regular market. The special terms orders supported by Scotia iTRADE are Odd Lot orders. These orders are not currently supported by PURE or fully supported by Alpha in the same manner as they are supported by the Principal Marketplace. All Odd Lot orders (including odd lot portions of mixed orders) will therefore be posted to the Principal Marketplace, currently the TSX or TSX-V. Clients should request guidance from the Scotia iTRADE Customer Service Desk on entry of all special terms orders.

  • Short Orders
    These orders will be filled in accordance with the "Standard Handling of Orders". The trade price of a short limit order must not be less than the Last Sale Price (LSP). The LSP is, in effect, the last sale price of either PURE, Alpha or TSX (or TSX-V), depending on the marketplace where the order is booked at the time of execution. Subject to marketplace functionality, orders entered below the LSP will be booked at the LSP and adjusted with the LSP (downward only) until the limit price is met or the order is fully executed. The tick rule is not enforced by the marketplaces for odd lot short limit orders.

  • Short Exempt Orders
    These orders will be filled in accordance with the "Standard Handling of Orders". The tick rule is not enforced by the marketplaces for short exempt orders.

  • Stop Limit and Stop Market Orders
    Stop Limit (Sell) orders are orders that become booked limit orders when a board lot is traded at or below the trigger price on the marketplace to which the order has been booked.

    Stop Limit (Buy) orders are orders that become booked limit orders when a board lot is traded at or above the trigger price on the marketplace to which the order has been booked.

    Since these orders are not immediately executable on order entry, when these orders are booked to the marketplace they will be booked to the Principal Marketplace (the TSX/TSXV) for execution and will remain on the Principal Marketplace until cancelled, executed, or expiry. Once booked to the Principal Marketplace, if these orders are changed, they will be handled in accordance with the Standard Handling of Orders.

    Stop (Sell) orders are orders that become booked market orders when a board lot is traded at or below the trigger price on the marketplace to which the order has been booked.

    Stop (Buy) orders are orders that become booked market orders when a board lot is traded at or above the trigger price on the marketplace to which the order has been booked.

    When a Stop (Sell) order or Stop (Buy) order is triggered, the order initially becomes a Limit order on the Principal Marketplace. Scotia iTRADE automatically cancels the Limit order and submits a new Market order which is subject to the Standard Handling of Orders.

    Since these orders are not immediately executable on order entry, when these orders are booked to the marketplace they will be booked to the Principal Marketplace (the TSX/TSXV) for execution and will remain on the Principal Marketplace until cancelled, executed, or expiry. Once booked to the Principal Marketplace, if these orders are changed, they will be handled in accordance with the Standard Handling of Orders.

  • Extenuating Circumstances

    In the event that the Pure and Alpha marketplaces are down, Scotia iTRADE will route all orders directly to the Principal Marketplace (TSX or TSX-V) for execution. In such circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to PURE or Alpha but remain unfilled. Until the alternate marketplaces are restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the retail client have the ability electronically to change or cancel these orders. Until PURE and Alpha are restored, orders subject to "Standard Handling of Orders" will be executed on the Principal Marketplace.

    In the event that the Principal Marketplace is down, all orders for TSX-listed securities will be rejected. In these circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to the Primary Marketplace but remaining unfilled. Until the Principal Marketplace is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability to electronically change or cancel these orders.

    In the event that one of Pure or Alpha is down but not both, all orders for TSX or TSXV-listed securities will be handled as above with only the active markets considered for best price execution. In these circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to the down marketplace but remaining unfilled. Until the down marketplace is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability to electronically change or cancel these orders.

    In the event the SOR service becomes inaccessible for any reason, Scotia iTRADE will route all orders directly to the Principal Marketplace (TSX or TSX-V) for execution. In such circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked through SOR but remaining unfilled. Until the SOR service is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability electronically to change or cancel these orders.

Trade Confirmations
An order executed on more than one marketplace will be reported to the client using a trade confirmation that confirms that the trade was executed on more than one marketplace. If the trade was executed at multiple prices, the trade confirmation may provide for average prices. In each of these circumstances, the confirmation will indicate that details are available on request.