Securities regulators have finalized new guidance on certain aspects of the disclosure that’s required to appear on trade confirmations.
The guidance, which sets out the language that dealers can use in making disclosure about client executions on trade confirmations, was published for comment earlier this year by the Investment Industry Regulatory organization of Canada (IIROC). Since then, it has made a couple of revisions, allowing dealers to use certain abbreviations, and permitting disclosures to be placed on the back of a trade confirmation.
Under the revised guidance, dealers are allowed to adopt general marketplace and average price disclosure on all trade confirmations whether a trade is carried out on one market or more, and whether a trade price is an average price of multiple trades or the price of a single trade. This allows dealers to use the same disclosure on all trade confirmations so that they are not required to produce separate disclosure for different sorts of transactions.
If any part of an order has been executed on a foreign market, IIROC recommends that the disclosure include the quantity of securities traded on the foreign market together with the applicable foreign exchange rate for any currency conversion.
Clients will continue to be able to obtain further details of the execution of any order at no cost from their dealer, and trade confirmations will continue to contain requisite information such as price and any commission charged, IIROC notes. Additionally, dealers must respect audit trail requirements and maintain appropriate records, it says.