IIROC proposes generic marketplace disclosure on trade confirmations

The current guidance requires that the marketplace should be identified on the trade confirmation if an order executes on a single marketplace or, if an order executes on multiple marketplaces, the disclosure may indicate that the transaction was executed on multiple marketplaces with details of each trade to be made available on request.

However, IIROC has found some firms have had operational difficulties in making the correct identification of the marketplace on trade confirmations, so it is proposing to allow the initial disclosure to be more generic.

“While the requirement for marketplace disclosure has not fundamentally changed, implementation of the current form of disclosure on trade confirmations has presented ongoing challenges,” it says. “IIROC has considered the practical implications of compliance with the current guidance on marketplace disclosure and the significance of the failures to make accurate disclosure to clients.” As a result, it is proposing that trade confirmations could simply say, that a security was: “Traded on one or more marketplaces or markets, details available upon request.”

“While the proposed form of disclosure places the onus on the client to obtain details regarding the venues on which the trade was executed, a participant would be able to respond with the correct marketplace information rather than potentially providing erroneous information at first instance on the trade confirmation,” the notice says.

If an order has been executed in whole or in part on a foreign market, IIROC expects that the disclosure will also include the quantity of securities traded on the foreign market together with the applicable foreign exchange rate for any currency conversion.

Comments on the proposed change are due by March 9.