IIROC publishes guidance on expansion of single-stock circuit breakers

Maintains fair and orderly markets

TORONTO, July 10, 2014 /CNW/ - The Investment Industry Regulatory Organization of Canada (IIROC) today published Final Guidance that expands the single-stock circuit breaker (SSCB) program.

The Guidance, which takes effect on February 2, 2015, expands the list of securities subject to SSCBs to include all securities that are considered "actively traded", extends the times when SSCBs are active to include more core trading hours when all marketplaces are open, and allows more than one SSCB to trigger for a particular security during the same trading day.

SSCBs are a tool to further mitigate market volatility. Together with other complementary IIROC initiatives, the expansion of SSCBs helps maintain fair and orderly markets, and fosters investor confidence.

An SSCB triggers—resulting in a five-minute trading halt—in situations when a covered security experiences a significant and unexplained short-term price movement.

Under the Guidance, IIROC will produce and make available at www.iiroc.ca, a report listing all securities subject to SSCBs. The report will be updated monthly.

The introduction of SSCBs in February 2012 and their current expansion are part of a series of IIROC reforms implemented since the May 6th 2010 "Flash Crash".  These measures include:

  • controls at the participant level introduced through the electronic trading rules (March 2013) and third-party marketplace access rules (March 2014);
  • a proposal for the introduction of marketplace thresholds;
  • IIROC's February 2013 update to market-wide circuit breakers; and
  • IIROC's August 2012 clarification of its policies and procedures on erroneous and unreasonable trades.

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IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.

IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employee and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) - General News

For further information: Karen Archer, Senior Media & Public Affairs Specialist, 416 865-3046, karcher@iiroc.ca; June Yee, Manager, Corporate Communications, 416 943-6921, jyee@iiroc.ca