Potential violations of trading rules come to IIROC’s attention from our surveillance practices, from compliance reviews of firms’ trading activities, or from other sources such as public complaints or referrals from other regulators.
When suspected violations are suspected, the case is referred to IIROC’s Trading Review and Analysis department for additional analysis or investigation. The Trading Review and Analysis department has two main functions:
First, it conducts preliminary investigations if there is reason to believe that improper trading activity may be occurring or has occurred.
Second, it conducts post-trade reviews of trading data to look for trading that violates trading rules, including manipulative trading practices such as high closing and conducts special reviews such as on the events of May 6, 2010.
IIROC’s Surveillance Technology Enhancement Platform (STEP) has rigorous analytical features that can assist staff in identifying possible rule violations and can recreate complex trading conditions through simulations.
When Trading Review and Analysis staff find evidence of a rule violation, they forward the case to IIROC’s Enforcement Department for further investigation and possible disciplinary action.
If our monitoring efforts or preliminary investigations detect evidence of possible insider trading activity, staff refer the details on to the appropriate provincial regulator. Where there is evidence of a breach of disclosure rules by a listed company, the department refers the case to both the appropriate securities regulator and listing exchange for additional investigation. Indications of possible criminal activities are reported to police agencies.