IIROC proposes expanded single-stock circuit breakers

On December 11, the Investment Industry Regulatory Organization of Canada released proposed guidance to broaden its application of single-stock circuit breakers.  

Specifically, under the new guidance, IIROC would extend the coverage of SSCBs to include all "actively-traded" securities (securities that traded an average of at least 500 times and with an average trading value of at least $1.2 million per trading day during the previous three months), increase the time during which SSCBs operate to include regular trading hours (i.e. 9:30 a.m. to 4:00 p.m., with a modified threshold during the post-open and pre-close periods), provide that SSCBs remain active for a security on a day when a regulatory halt has occurred on that security, and modify the general trigger for a trading halt to an increase or decline in price of at least 10% and 20 trading increments in a five minute period.

During the post-open (9:30 a.m. to 9:50 a.m.) and pre-close (3:30 p.m. to 4:00 p.m.) periods, the trigger would be a price increase or decline of at least 20% and 40 trading increments in a five minute period. According to IIROC, the post-open and pre-close periods are periods of natural volatility during which a higher threshold should apply.

In connection with the proposal, IIROC will maintain on its website a report listing all securities that are subject to SSCBs, which will be updated monthly and in the event of certain changes. Comments are being accepted by IIROC until March 10, 2014. For more information, see IIROC Notice 13-0298.

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