Ms. Susan Jenah reports

IIROC PUBLISHES NEW RULE REQUIRING DEBT TRANSACTION REPORTING

The Investment Industry Regulatory Organization of Canada today published a new debt transaction reporting rule to take effect in November, 2015, bringing greater regulatory transparency to a growing and significant asset class.

Under the new framework, dealer members will be required to report to IIROC, on a posttrade basis, debt security transactions they execute and those of their affiliates that are government securities distributors. The framework has been approved by the Canadian Securities Administrators. By November, 2015, it is expected that more than 90 per cent of dealer-member debt trading activity will be subject to IIROC regulatory oversight.

Participation in the debt market by institutional and retail investors has increased significantly in recent years, with the value of bond trading in Canada in 2013 estimated to be $11.9-trillion, compared with $1.95-trillion in equity markets.

"We recognize that fixed income plays an important role in helping investors achieve their financial goals. We have taken this significant step to enhance our timely and effective regulatory oversight of trading in this asset class," said Susan Wolburgh Jenah, IIROC president and chief executive officer.

A new market trade reporting system (MTRS 2.0) will facilitate the collection and analysis of detailed debt trade reports.

IIROC has worked co-operatively with the Bank of Canada to develop the new system, with extensive input from industry stakeholders. MTRS 2.0 will run in parallel to the existing MTRS for a period of time to ensure data integrity, and development of new volume statistics and reports. Consistent with current practice, IIROC will continue to publish only aggregate debt trading statistics.

"With this new system in place, we will be able to better monitor activity, and ensure compliance with investor protection and market integrity requirements in a cost-effective manner," added Ms. Jenah.

Work is also under way, with the assistance of an industry working group, to develop a proposed cost-recovery fee model, which will be published by IIROC for comment by the end of 2014.