IIROC republishes proposal on marketplace thresholds

TORONTO, March 30, 2015 /CNW/ -Â The Investment Industry Regulatory Organization of Canada (IIROC) today republished for comment proposed guidance on the establishment and operation of price thresholds by Canadian marketplaces to further reduce short-term, unexplained price volatility and address risks arising from electronic trading.

Today's publication reflects responses from stakeholders to proposed guidance IIROC published for comment in April 2014 and input from further industry consultation. There are three significant changes in today's revised proposal:

• IIROC is proposing specific price thresholds beyond which a marketplace must preclude trading activity rather than allowing each marketplace to determine its threshold levels;
• all marketplaces, including dark marketplaces, would be required to implement marketplace thresholds; and
• marketplace thresholds would not apply to opening orders or market-on-close orders.

"This revised proposal reflects IIROC's commitment to maintaining fair and orderly markets while lessening the need for regulatory intervention," said Wendy Rudd, IIROC's Senior Vice President, Market Regulation and Policy. "Marketplace thresholds complement a series of IIROC reforms that help enhance market integrity and foster investor confidence."

Since 2010, IIROC has implemented the following reforms to reduce the number of erroneous trades and unexplained short-term price volatility:

• controls at the participant level introduced through electronic trading rules in March 2013, and implementation of third-party marketplace access rules in March 2014;
• introduction of single-stock circuit breakers in February 2012, and their subsequent expansion in February 2015;
• enhancements to market-wide circuit breakers in February 2013; and
• clarification in August 2012 of IIROC's policies and procedures on erroneous and unreasonable trades.

The revised proposal is out for comment until May 29, 2015.

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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