TSX Market Making Program Guide

TSX Market Making Program Guide Entering the Program TMX Group Page 8 1) Firms eligible to bid on assignments available as either new listings or as Stock Underperformance Reallocations (e.g., a firm that was not one of the Market Makers on a stock subject to a Stock Underperformance Reallocation and has not exceeded the threshold for underperformance) may submit their bids within the allotted time. TSX keeps all bids confidential until the assignment decision is made. 2) Bids for assignments must include a Market Maker’s commitments in respect of the following areas, subject to the published minimum and maximum levels defined in Appendix A - Performance Guidelines a. Spread Goal b. % Time at NBBO c. Top of Book Size 3) The TSX Allocation Committee reviews and approves assignments. Tier B securities are assigned first in order to establish the total number of Tier A securities each Market Maker is eligible to be assigned. All securities are assigned to bidding firms using the following criteria, subject to TSX discretion: a. The bid(s) with the highest Total Relative Score determine the stock level metrics and the Market Makers with the first and second best Total Relative score are awarded the assignment and both subject to the same stock level metrics. If the Market Maker with the second best relative score declines the assignment, the Market Maker with the 3rd highest Total Relative score is offered the assignment, and so on, until each assignment has two Market Makers. The Total Relative Score is calculated as follows: For each metric, a Relative Score is assigned: 10 points are awarded to the most competitive bid, 0 points are awarded to the least competitive bid, and all bids in between earn a pro-rated number of points based on the difference between the best and worst bid. The Total Relative Score is calculated as the weighted average of all Relative Scores in accordance with the following weightings: Spread Goal % Time at NBBO Top of Book Size Tier A Securities 10% 50% 40% Tier B Securities 50% 25% 25%