CSA publish amendments to marketplace operation and trading rules
The Canadian Securities Administrators (CSA) published a notice today outlining amendments to National Instrument 21-101 Marketplace Operation, National Instrument 23-101 Trading Rules and their related companion policies. The amendments follow in the footsteps of earlier proposals, discussed in our post of October 2008. Meanwhile, the Investment Industry Regulatory Organization of Canada (IIROC) published a notice today regarding proposed amendments to the Universal Market Integrity Rules that would complement the changes announced by the CSA.
Under the CSA amendments, an order protection rule would require marketplaces to establish and ensure compliance with policies and procedures designed to prevent trade-throughs on that marketplace. Such protection is intended to ensure that all immediately accessible, visible, better-priced limit orders are executed before inferior-priced limit orders and are not traded through. A number of exceptions to the prohibition, however, are included in the amendments, including directed-action orders, non-standard orders, closing-price orders and trade-throughs that occur when the best protected bid is higher than the best protected offer (crossed market). Amendments respecting fair access to marketplaces, trading fee limitations and locked and crossed markets were also included under the order protection rule. Additional changes are also being made to marketplace systems, transparency requirements and the technological requirements and obligations of an information processor.
Subject to Ministerial approvals, the changes other than those relating to the Order Protection Rule are scheduled to come into force on January 28, 2010, while the Order Protection Rule will become effective on February 1, 2011.
Under IIROC's proposed amendments, meanwhile, rules and policies respecting "best price" obligations, which currently address order protection in Canada, would be repealed and a number of consequential changes to UMIR would also be implemented. Comments on IIROC's proposed amendments are being accepted until January 12, 2010.
