Given the continued shift to remote working, the Bourse de Montréal Inc. (MX) is calling on the industry to ensure trading oversight is up to snuff.
In a notice to the industry, the regulatory division of the MX set out its plans and priorities for the year ahead, stressing that, “Supervision and surveillance of trading activity will be a significant area of focus.”
Despite the fact that much of the industry is operating remotely, the MX said that best practices still demand that firms: provide proper trade surveillance, either onsite or remotely; devote adequate resources to compliance; and that they monitor trader communications for “potential misconduct.”
The MX also noted that through complaints and industry feedback, its regulatory division “has identified other compliance gaps or failures.”
To address those issues, the organization called on firms to ensure that they are meeting supervisory and surveillance requirements, “regardless of whether trade activity is conducted directly or through access provided by another approved participant.”
“This includes evaluating and documenting trade activity for evidence of potential manipulation or misconduct, adjusting the surveillance program for employees working remotely,” the MX said.
Additionally, it reminded firms to update their internal policies and procedures when regulatory amendments come into effect, and to ensure that they are meeting their recordkeeping and record retention obligations.
In 2021, the MX’s regulatory division will be pursuing its several initiatives, including enhancing surveillance, utilizing a new machine learning tool to detect anomalies in the options market, and adopting a new position limit methodology.
It will also be revamping its website, launching an outreach program and establishing cybersecurity requirements for firms.
In a separate notice, the MX announced the introduction of long-term futures contracts on the S&P TSX 60 index, starting Feb. 2, with yearly December expiries for 2022 to 2025.