Changes to
Companion Policy 23-101CP Trading Rules
1. The
changes to Companion Policy 21-101CP are set out in this Schedule.
2. Subparagraph
6.3(c)(ii) is changed by replacing "disaplayed" with "displayed".
3. Subsection
6.4(1) is changed by replacing "shall" with "must".
4. Companion
Policy 23-101CP is changed by replacing section 7.1 with:
7.1 Monitoring and Enforcement of Requirements
Set By a Recognized Exchange or Recognized Quotation and Trade Reporting System
- Under section 7.1 of the
Instrument, a recognized exchange will set its own requirements governing the
conduct of its members. Under section 7.3 of the Instrument, a recognized
quotation and trade reporting system will set its own requirements governing
the conduct of its users. The recognized exchange or recognized quotation and
trade reporting system can monitor and enforce these requirements either
directly or indirectly through a regulation services provider. A regulation services provider is a person or company that
provides regulation services and is either a recognized exchange, recognized
quotation and trade reporting system or a recognized self-regulatory entity.
If a recognized exchange or recognized quotation and
trade reporting system has entered into a written agreement with a regulation
services provider, it is expected that the requirements adopted by the
recognized exchange or recognized quotation and trade reporting system under
Part 7 of the Instrument will consist of all of the rules of the regulation
services provider that relate to trading. For example, if a recognized
exchange or recognized quotation and trade reporting system has entered into a
written agreement with IIROC, the rules adopted by the recognized exchange or
recognized quotation and trade reporting system are all of IIROC’s Universal
Market Integrity Rules. Clock synchronization, trade markers and trading halt
requirements would be examples of these adopted rules that relate to the
regulation services provider’s monitoring of trading on the recognized exchange
or recognized quotation and trade reporting system and across marketplaces.
We are of the view that all of the rules of the
regulation services provider related to trading must be adopted by a recognized
exchange or recognized quotation and trade reporting system that has entered
into a written agreement with the regulation services provider given the
importance of these rules in the context of effectively monitoring trading on
and across marketplaces. We note that the regulation services provider is
required to monitor the compliance of, and enforce, the adopted rules as
against the members of the recognized exchange or users of the recognized
quotation and trade reporting system. The regulation services provider is also
required to monitor the compliance of the recognized exchange or recognized
quotation and trade reporting system with the adopted rules but it is the
applicable securities regulatory authority that will enforce these rules
against the recognized exchange or recognized quotation and trade reporting
system.
Sections 7.2 and 7.4 of the Instrument
require the recognized exchange or recognized quotation and trade reporting
system that chooses to have the monitoring and enforcement performed by the
regulation services provider to enter into an agreement with the regulation
services provider in which the regulation services provider agrees to enforce
the requirements of the recognized exchange or recognized quotation and trade
reporting system adopted under subsection 7.1(1) and 7.3(1).
Specifically, sections 7.2 and 7.4 require the written
agreement between a recognized exchange or recognized quotation and trade
reporting system and its regulation services provider to provide that the
regulation services provider will monitor and enforce the requirements set
under subsection 7.1(1) or 7.3(1) and monitor the requirements adopted under
subsection 7.1(3) or 7.3(3).
Paragraph 7.2.1(a)(i) mandates that a recognized
exchange must transmit information reasonably required by the regulation
services provider to effectively monitor the conduct of and trading by
marketplace participants on and across marketplaces. The reference to
monitoring trading "across marketplaces" refers to the instance where
particular securities are traded on multiple marketplaces. Where particular
securities are only traded on one marketplace, the reference to "across
marketplaces" may not apply in all circumstances.
Paragraph 7.2.1(a)(ii) requires that a recognized
exchange must transmit information reasonably required by the regulation
services provider to effectively monitor the compliance of the recognized
exchange with the requirements adopted under subsection 7.1(3). As well,
subsection 7.2.1(b) requires a recognized exchange to comply with all orders or
directions of its regulation services provider that are in connection with the
conduct and trading by the recognized exchange’s members on the recognized
exchange and with the regulation services provider’s oversight of the
compliance of the recognized exchange with the requirements adopted under
7.1(3).
5. These
changes become effective on October 1,
2015.