IIROC proposes guidance on stop loss order handling

Dealers reminded of responsibility for fair and orderly markets

TORONTO, April 12, 2013 /CNW/ - The Investment Industry Regulatory Organization of Canada (IIROC) today issued proposed guidance on the management of stop loss orders.

IIROC has noted a number of circumstances recently in which the execution of stop loss orders, including from "discount brokerage" accounts, has required intervention by IIROC to vary or cancel trades.

The goal of the proposed guidance is to reduce disruptions to fair and orderly markets in Canada. It confirms that dealers' obligations under the UMIR electronic trading rule amendments ("ETR"), which took effect March 1, 2013, extend to the entry of stop loss orders and the execution of triggered stop loss orders.

"As equity trading becomes increasingly automated and complex, it is important that all participants take responsibility for the integrity of the markets," said IIROC President and Chief Executive Officer Susan Wolburgh Jenah. "Regulatory intervention by IIROC should be required only in exceptional circumstances."

IIROC intends to continue monitoring the impact of stop loss orders on fair and orderly markets and will assess whether additional regulatory steps are required.

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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

Lucy Becker
Vice President, Public Affairs
416.943-5870
[email protected]