IIAC’s Response to Proposed Guidance on Marketplace Thresholds (IIAC Blog)

June 14, 2015 by

The IIAC has submitted comments to the Investment Industry Regulatory Organization of Canada (IIROC) on the proposed guidance requiring Canadian exchanges and alternative trading systems to establish specific price thresholds that, when breached, would trigger a halt in trading in the event a particular stock experiences rapid and unexplained price movement over a short period of time.

The IIAC generally supports the principles of the guidance, but voiced significant concern with the requirement that dealers tailor their individual order flow so as to avoid exceeding the marketplace threshold for a particular security.

In our view, adding dealer thresholds creates redundancy. The proposed approach is unnecessarily complex, would result in inconsistent practices among dealers in setting triggers for thresholds, could prejudice certain investors whose orders may have to be held back, and could potentially be a very costly proposition as new and more elaborate technology will be required to implement an effective dealer threshold. Rather, we believe the responsibility for administering thresholds should fall solely on each marketplace.

Read our submission.

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