The Investment Industry Regulatory Organization of Canada (IIROC) on Monday proposed new guidance on time synchronization requirements for marketplaces and dealers.

The guidance aims to clarify IIROC’s expectations regarding compliance with the time synchronization requirements under the trading rules, which requires each market and each market player to synchronize their clocks to the clock used by the market regulator.

According to a notice published on Monday, the proposed guidance would: set the Coordinated Universal Time (UTC) as the accepted reference time source; provide flexibility in selecting the time protocol or synchronization method; set allowable clock drift levels for each type of clock and the method of calculation; and introduce a requirement that markets and participants notify IIROC when there are time drifts beyond the allowable time drift level.

Tighter time synchronization standards “will improve the credibility of data received by IIROC … and minimize the number of false positive alerts that are based on national best bid or offer (NBBO),” the notice says.

The proposals are out for comment until Nov. 18.