The Canadian Investment Regulatory Organization (CIRO) has begun phase two of its project to clean up its guidance on the trading rules, in a bid to ease compliance with those requirements.
As part of its effort to enhance market regulation, the self-regulatory organization has been working on a project to review and update its trading rule guidance.
In phase one of that project, which was completed in August, the SRO made minor changes to a series of guidance notes to improve their accuracy and consistency, and to scrap outdated elements of those notes.
For phase two, the SRO aims to make it easier for investment dealers to navigate the regulator’s guidance by streamlining, consolidating and simplifying its guidance notes, while also clarifying the regulator’s policy positions in certain areas.
The first set of revisions under phase two have now been released, with updated guidance on double printing, trading in U.S. and Canadian currencies, and to clarify that various aspects of the trading rules — such as the provisions against manipulative and deceptive trading and various other requirements — apply to an “access person” as they do to market participants.
The revised guidance on “double printing” — when two trades are executed when only one was necessary to execute an order — aims to clarify the prohibition against that practice, which may “create artificial volume and a false or misleading appearance of trading activity,” and details how orders should be handled and marked in certain scenarios.
The guidance on trading in U.S. and Canadian dollars clarifies that, “Generally, trades in a security denominated in Canadian currency will be treated as if the trades were made in a distinct security from trades denominated in U.S. currency for the purpose of determining acceptable arbitrage activity, the last sale price, best ask price and best bid price. However, trading activities in both currencies may be aggregated to determine whether the security qualifies as a ‘highly-liquid security’.”
CIRO said that it expects to issue updated guidance as part of phase two of the project intermittently throughout the rest of its current fiscal year (ending March 31, 2026).