Under Recognition Orders issued by the Canadian Securities Administrators (CSA) and by agreement with the marketplaces, IIROC monitors all equity and debt market activity on all Canadian marketplaces, including stock exchanges and alternative trading systems, to detect manipulative trading practices and other breaches of the marketplace trading rules. Our goal is to ensure trading is carried out in accordance with Universal Market Integrity Rules (UMIR) and other IIROC rules.
Surveillance of Equity Trading
IIROC monitors equity trading on Canadian marketplaces in real time using a state-of-the-art technology platform, SMARTS.
The goal of IIROC’s Equity Market Surveillance team is to detect manipulative or unfair trading practices and other breaches of the marketplace trading rules to ensure market integrity and to protect investors.
In addition to real-time surveillance, IIROC’s Trading Review & Analysis team conducts post-trade reviews to investigate potential trading rule violations.
We also monitor for timely disclosure of material information by companies that could affect their stock price on the Canadian marketplaces that have retained IIROC as their regulation services provider.
IIROC detects potential violations of trading rules through our surveillance practices, as well as from our compliance reviews of firms’ trading activities, or other sources such as public complaints or referrals from other regulators.
Suspected violations of trading rules are escalated to IIROC’s Trading Review & Analysis team for additional analysis. Our Trade Review & Analysis team has two main functions:
- Conduct preliminary investigations if there is reason to believe that improper trading is occurring or has occurred.
- Conduct post-trade reviews of data to monitor for trading that violates trading rules, including market manipulation.
When our Trading Review & Analysis team finds evidence of a rule violation, they refer the case to IIROC’s Enforcement team or other regulatory agencies, primarily the provincial/territorial securities regulators, for further investigation and possible disciplinary action.
Where we find evidence of potential insider trading, we refer the matter to the provincial/territorial securities regulators.
For information on how we oversee trading practices at our Dealer Members, see Dealer Member Compliance.
Surveillance of Debt Trading
IIROC monitors all fixed income trading conducted by our Dealer Members through various fixed income alternative trading systems (ATS), Inter Dealer Bond Brokers (IDBBs) or over the counter (OTC). Our Debt Surveillance team utilizes a state-of-the-art technology platform, SMARTS, to detect market abuses such as manipulation, trading ahead of new issues or client front running.
Our goal is to detect manipulative or unfair trading practices and other breaches of Dealer Member Rules in order to ensure market integrity and to protect investors.