Dealers reminded of responsibility for fair and orderly markets
TORONTO, July 11, 2013 /CNW/ - The Investment Industry Regulatory
Organization of Canada (IIROC) today issued final guidance on the management and execution of stop loss orders to protect market
The guidance addresses concerns about the ongoing incidence of trades
resulting from the automated execution of stop loss orders, requiring
regulatory intervention by IIROC.
"When multiple stop loss orders are triggered and executed without
regard for their impact, investor confidence is unnecessarily
compromised," said Wendy Rudd, IIROC's Senior Vice-President, Market
Regulation and Policy. "This guidance confirms that dealers are
responsible for the appropriate execution of their clients' orders, and
for the maintenance of fair and orderly markets. Regulatory
intervention by IIROC should be required only in exceptional
The final guidance provides specific direction to dealers on the use and
management of stop loss orders in relation to their obligations under
UMIR electronic trading rule amendments ("ETR"), which took effect
March 1, 2013.
IIROC intends to continue monitoring the impact of stop loss orders on
fair and orderly markets and will assess whether additional regulatory
steps are required.
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 by creating and
enforcing rules regarding the proficiency, business and financial
conduct of dealer firms and their registered employees and through the
creation and enforcement of market integrity rules regarding trading
activity on Canadian marketplaces.
SOURCE: Investment Industry Regulatory Organization of Canada (IIROC) - General News
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