The Canadian Securities Exchange (CSE) is bringing back stop loss orders in response to demand from investment dealers, who want the functionality for their retail clients,
According to a notice published Thursday, the CSE is seeking to reactivate “on-stop” orders, which are also commonly known as “stop loss” orders.
“The changes are being implemented in response to customer demand,” the CSE notice says. “The reinstatement of on stop orders will provide additional risk management capabilities,” it adds.
In the past few years, regulators have revised guidance for the use of stop loss orders in the wake of events such as the “flash crash” in 2010 revealed how certain order types could exacerbate volatility.
Separately, the CSE also announced changes designed to add price protection, and reduce the price volatility of oddlot trades. “The changes are being implemented in response to customer demand, and to improve the quality of oddlot fills and maintain the integrity of the price discovery mechanism,” the CSE says in a notice.
Comments on the proposals are due by June 12.