IIROC proposes expansion of single-stock circuit breakers

Maintains fair and orderly markets

TORONTO, Dec. 11, 2013 /CNW/ - The Investment Industry Regulatory Organization of Canada (IIROC) today published for comment proposed guidance to expand the single-stock circuit breaker program (SSCBs) to further mitigate market volatility.

The proposed guidance would:

  • expand the list of securities subject to SSCBs to include all securities that are considered "actively traded"
  • extend the times when SSCBs are active to include the entire regular trading day; and
  • allow more than one SSCB to trigger for a particular security during the same trading day.

"We are committed to maintaining fair and orderly markets and the expansion of single-stock circuit breakers, together with other complementary measures, enhances market integrity and fosters investor confidence," said Susan Wolburgh Jenah, IIROC's President and Chief Executive Officer.

Under the proposal, IIROC would produce a report, available on its website, listing all securities subject to SSCBs which would be updated monthly once the guidance is finalized.

The introduction and expansion of SSCBs is part of a series of IIROC reforms implemented since the May 6th 2010 "Flash Crash".  They include:

  • controls at the participant level introduced through the electronic trading rules (March 2013) and pending implementation of third-party marketplace access rules (March 2014);
  • an upcoming proposal for the introduction of marketplace thresholds;
  • IIROC's February 2013 update to market-wide circuit breakers; and
  • IIROC's August 2012 clarification of its policies and procedures on erroneous and unreasonable trades.

The proposed guidance, when finalized, would replace prior guidance published February 2012 in which IIROC introduced SSCBs on an "initial implementation phase" basis. The proposal is out for comment until March 10, 2014.

***

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 employee 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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