TORONTO, Dec. 7, 2012 /CNW/ - The Investment Industry Regulatory
Organization of Canada has adopted rule amendments, approved by the
Canadian Securities Administrators (CSA), designed to ensure the
effective management of risks associated with electronic trading.
The amendments expand on existing obligations under the Universal Market
Integrity Rules (UMIR) by assigning IIROC-regulated dealers clear
supervisory and gatekeeper responsibilities to protect against errors
related to electronic trading. The changes will ensure that market
participants have appropriate automated filters, testing of algorithms,
and other risk management tools in place for handling orders before
those orders enter the marketplace.
"The revised rules will help to bolster market integrity by ensuring
that electronic trading risks are mitigated through appropriate
controls for all trading activity, regardless of source," said Susan
Wolburgh Jenah, IIROC's President and Chief Executive Officer.
The changes establish another tier in a comprehensive system of controls
which include single-stock and market-wide circuit breakers. They also
align UMIR rules with the CSA's implementation of NI 23-103 Electronic Trading.
The amendments are effective March 1, 2013. However, in recognition of
the technology enhancements required to effectively operationalize
automated controls, IIROC dealers will have until May 31, 2013 to fully
test and implement their automated controls.
All Canadian equity marketplaces are accessed electronically.
The UMIR amendments confirm that Participants and Access Persons are
responsible for managing the risks associated with their order flow and
their clients' order flow - this responsibility cannot be delegated.
The amendments require automated controls to prevent entry of an order
exceeds a pre-determined credit / capital threshold;
exceeds a pre-determined value or volume limit on orders from a
Participant, Access Person or client; or
violates UMIR or any applicable securities regulation.
These amendments, in conjunction with other IIROC initiatives that are
underway or completed, will establish a comprehensive system of
controls at multiple levels:
Electronic Trading Rules
Single-Stock Circuit Breakers
Market-Wide Circuit Breakers
IIROC discretion to vary or cancel trades
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
For further information:
Vice President, Public Affairs