Canadian Securities Regulators Establish Regulatory Framework to Manage Electronic Trading Risks
The Canadian Securities Administrators (CSA) have announced the implementation of NI 23-103 Electronic Trading, which establishes a regulatory framework for the oversight and management of the risks associated with the use of electronic trading on Canadian marketplaces. Subject to ministerial approval, this new policy will come into effect on March 1, 2013.
According to the CSA, the framework is designed to address certain risks to Canadian markets related to the speed and automation of electronic trading, and ensure that marketplaces and marketplace participants are actively monitoring and managing these risks. Specifically, the framework will require, among other things, marketplace participants who enter orders electronically to maintain policies, procedures and controls to manage the risks associated with accessing the markets in this manner.
The rule was developed following consultations with marketplaces, marketplace participants and service vendors, and is consistent with international approaches to regulating electronic trading.
A copy of NI 23-103 and its related Companion Policy is available on the Ontario Securities Commission website and on the websites of other CSA members.
In conjunction with the CSA's new framework, the Investment Industry Regulatory Organization of Canada (IIROC) has also issued for comment a package of proposed Universal Market Integrity Rule amendments to align market trading rules with N1 23-103. For more information and a copy of IIROC's proposed amendments, refer to their June 28, 2012 news release.
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