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Trading Halts & Timely Disclosure



Disclosure rules require that companies report all material information about their business and financial affairs to the public in a timely and fair manner. These rules aim to ensure that investors are given equal access to material information.

IIROC monitors the timely disclosure of material information by companies trading on marketplaces that have retained IIROC as their regulation service provider. Media releases issued by listed companies with material information are reviewed by IIROC surveillance staff before being released on the newswires or the company’s website. If a news release is unclear or overly-promotional, IIROC may ask the company to revise it.

When surveillance staff believe that the information is material enough to significantly impact the price of the security they might issue a “trading halt.” A trading halt is a temporary pause in trading to allow the market to properly absorb the information. It is based on the principle that all investors should have the same timely access to important company information.

The reactivation of trading after a halt is called a “trade resumption.”

For fiscal year ended March 31, 2016, Market Surveillance coordinated 1046 halts and resumptions across all listing marketplaces.

If IIROC staff notice erratic price moves in stocks, they will contact the issuer to see if it has information to explain the movement. Staff may ask the company to issue a news release if they believe that material information is leaking into the market or if they believe rumours are affecting the stock price.

When a company fails to make timely disclosure of material information, the provincial securities regulators can issue a Cease Trade Order (CTO) which stops the trading of the company’s stock. Once issued, a CTO remains in effect until the company meets its disclosure obligations.

For fiscal year ended March 31, 2016, Market Surveillance coordinated 123 Cease Trade Orders (CTOs).

Visit Halts & Resumptions / Cease Trade Orders page for latest information.

 

FAQs

 

  1. Why was ABC Company halted and at whose request?

  2. Does IIROC review company news releases prior to public dissemination?

  3. What is the difference between a "trading halt", a "Cease Trade Order", a "suspension" or a "business halt"?

  4. How does IIROC notify the public about halts and resumptions?

  5. Does a halt mean there is something wrong with the listed company?

  6. What is the company news that led to a trading halt? Is it good or bad news?

  7. How long will trading be halted?

 


 

1. Why was ABC Company halted and at whose request?

 

A stock is generally halted pending the release of material news that may affect the price of a stock. A trading halt allows the market to digest this information and also creates a level playing field among investors. Halts are issued by IIROC for regulatory reasons or at the request of the involved company. When a company requests a trading halt (usually prior to issuing a news release), the company must assure IIROC that its announcement is imminent. The nature of the announcement and the current status of events must also be disclosed to IIROC, so that IIROC can assess the need and timeframe for the trading halt. Halts can also be issued to restore fair and orderly trading.

 

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2. Does IIROC review company news releases prior to public dissemination?

 

TSX listed companies are required to submit their material news releases to IIROC for review prior to being disseminated over the news wires, however, issuers are encouraged to submit all news release announcements. Listed companies on the TSX Venture Exchange must have IIROC review their news releases in accordance with TSX Venture Policy 3.3. The CSE Timely Disclosure policy and Part V of the Aequitas Neo Exchange Listing Manual requires their respective issuers to provide a draft news release to Market Surveillance in advance of issuance, if the news is deemed material. If you are a company representative and have a question about a news release, please contact an IIROC Surveillance Officer.

 

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3. What is the difference between a "trading halt", a "Cease Trade Order", a "suspension" or a "business halt"?

 

A trading halt is issued to suspend trading in a security while material news from the company is disseminated. Halts are usually temporary - less than two hours - with trading resuming once the company has issued the important news. Halts and resumptions are issued by IIROC or a marketplace upon which the security is listed or quoted.

A Cease Trade Order (CTO) is issued against a company for a variety of reasons including failing to meet its disclosure requirements such as filing a quarterly or annual financial statement, or as a result of an enforcement action that involves an investigation of wrongdoing. A CTO is often in place for an extended period of time and can be indefinite. CTOs are issued by the Securities Commissions.

Suspensions are implemented by listing exchanges and generally are a precursor to eventual delisting. Reasons for a suspension include failure to maintain listing requirements.

A business halt, also known as an exchange halt, is implemented by a listing exchange, however in most cases it is expected that the stock will resume trading. Reasons for a business halt include a company undergoing a corporate transaction such as a reverse takeover (RTO) or an interruption in trading caused by system issues.

 

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4. How does IIROC notify the public about halts and resumptions?

 

IIROC disseminates a notice over the news wire services. You can access halts, resumptions and CTOs in the News & Publications section of our website.

 

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5. Does a halt mean there is something wrong with the listed company?

 

No. A halt in trading does not reflect upon the reputation or management of a company nor upon the quality of its securities. In fact, most trading halts are usually made at the request of the listed company involved.

 

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6. What is the company news that led to a trading halt? Is it good or bad news?

 

IIROC does not divulge any material news about a company's business or financial affairs. Please contact or visit the website of the company involved for this information.

 

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7. How long will trading be halted?

 

A trading halt is normally very temporary – typically lasting less than two hours. The actual length of the trading halt is determined by IIROC, taking into account the significance of the company's announcement and the time required to disseminate the announcement.

 

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