April 26, 2007

TRADING FEE EXEMPTIONS FOR DESIGNATED MARKET MAKERS

In CNQ Notice 2007-002, CNQ proposed amendments to the rules governing order entry. In the Notice, it was stated that CNQ was also considering fee incentives for Designated Market Makers to encourage continued participation in the market. CNQ recognizes that much of the liquidity and price continuity exhibited on the Exchange can be attributed to the direct participation of the Market Makers. To further enhance liquidity, CNQ will reduce trading costs to Market Making firms by eliminating the trading fee for passive trades by Designated Market Makers.

Pursuant to CNQ Trading Rules, crosses may only be executed between the bid and ask, thereby resulting in price improvement. The Designated Market Maker side of intentional crosses will therefore be exempt from trading fees. Also, all oddlot trades by Designated Market Makers will be fee-exempt.

The fee exemptions apply to all Designated Market Makers on the stocks for which they have been approved by CNQ, and will be effective May 1, 2007. Current fees for all other Market Maker trades will remain unchanged.

A CNQ Dealer approved as a Market Maker must maintain a continuous two-sided quotation reasonably related to the prevailing market, for a minimum of three months, and provide at least 30 days advance notice of an intention to relinquish Market Maker Obligations. A Designated Market Maker accepting a client order from a CNQ dealer must provide best execution for that client order, and is entitled to a reasonable commission or transaction fee.

CNQ Dealers wishing to act as a Market Maker must file a notice with CNQ on the Market Maker Application Form available in the Dealer Forms section of CNQ.ca, and appoint a Primary Trader to perform the obligations set out in the Trading Rules.

For further information, please contact:
Mark Faulkner, Director, Listings and Regulation,
416.572.2000 x2305
Mark.Faulkner@cnq.ca