TORONTO, Feb. 2, 2012 /CNW/ - The Investment Industry Regulatory Organization of Canada (IIROC) has
implemented single-stock circuit breakers (SSCBs) as part of a series
of reforms to help control short-term volatility in stock prices.
This means that a five-minute halt of trading in a security will now
automatically trigger across all Canadian marketplaces if the price of
the security swings 10% or more within a five-minute period.
"Single-stock circuit breakers will be an important tool to help
mitigate volatility in the trading of individual stocks," said Susan
Wolburgh Jenah, IIROC's President and Chief Executive Officer.
"Together with other complementary IIROC initiatives, this tool is an
important ingredient in building investor confidence and enhancing
The introduction of SSCBs is one of a series of IIROC reforms following
the events of the May 6th Flash Crash of 2010. Others include:
industry guidance and an investor forum in 2011 on the use of certain
order types in today's high-speed, multiple-marketplace environment;
ongoing discussions on the harmonization of volatility controls at the
a recently issued request for comments revisiting the current approach
to market-wide circuit breakers; and
ongoing review and clarification of our policies and procedures on
erroneous and unreasonable trades.
Initially, SSCBs will apply to all securities included in the S&P/TSX
Composite Index, as well as to those exchange-traded funds (ETFs) which
are comprised principally of listed securities. All trades executed at
more than 5% beyond the price that triggered the SSCB will be
Read more in the IIROC Notice: Guidance Respecting the Implementation of Single-Stock Circuit Breakers, issued today.
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 employees 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
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