Focus on market integrity as trading evolves
TORONTO, Feb. 14, 2013 /CNW/ - The Investment Industry Regulatory
Organization of Canada (IIROC) today issued final Guidance on certain manipulative and deceptive trading practices following
consultations that took place in 2012.
IIROC's Universal Market Integrity Rules (UMIR) prohibit market manipulation and abusive trading practices by any
means, whether through the use of sophisticated technology or manual
IIROC recognizes, however, that innovations in technology can be used to
facilitate potentially abusive trading strategies often associated with
algorithmic and high frequency trading (HFT). Today's Guidance sets
out, but is not limited to, five specific trading strategies that would
be considered manipulative and deceptive:
Abusive Liquidity Detection.
"In this changing environment where market structure and dynamics are
evolving quickly, IIROC will continue to actively monitor for abusive
practices as well as new forms of manipulation that may emerge," said
IIROC President and Chief Executive Officer Susan Wolburgh Jenah.
IIROC-regulated dealers serve as gatekeepers and play an important role
in fostering market integrity and confidence. Ensuring they have
procedures to detect and report manipulative and deceptive activity, as
well as processes and controls to review trading by clients that use
sophisticated technologies, is integral to achieving this outcome.
IIROC's comprehensive study on trading activity related to HFT in the Canadian equity markets is
currently entering the third phase, which will explore the impact of
HFT and related trading on market quality and integrity. This research
will help to inform future reforms that should be considered.
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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