Amendments Respecting the Reporting of Certain Trades to Acceptable Foreign Trade Reporting Facilities

18-0154
Type: Rules Notice> Approval/Implementation
Rule connection:
UMIR
Distribute internally to:
Institutional
Legal and Compliance
Senior Management
Trading Desk
Retail

Contact:

Sonali GuptaBhaya
Director, Market Regulation Policy
Telephone:
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Executive Summary

On  July 31, 2018, the applicable securities regulatory authorities approved amendments to UMIR (Amendments).  Among other things, the Amendments:

  • introduce a definition of “acceptable foreign trade reporting facility”
  • add a new provision to UMIR 6.4(2) that would allow the following trades in a listed security or quoted security to be reported to an acceptable foreign trade repoting facility:
    • over 50 standard trading units and $100,000 in value
    • originating from a contingent order related to a derivative transaction where the derivative transaction occurs outside of Canada and the trade in the listed security or quoted secrutiy is handled by the same intermediary as the derivative transaction (derivative-related contingent order).

On April 21, 2016 IIROC published for comment proposed changes relating to acceptable foreign trade reporting facilities in IIROC Notice 16‑0082 - Proposed Amendments Respecting the Reporting of Certain Trades on Acceptable Foreign Trade Reporting.  In response to comments received and further industry consultation, we re-published proposed rule changes for comment on May 25, 2017 in IIROC Rules Notice 17‑0111 Re-publication of Proposed Amendments Respecting the Reporting of Certain Trades to Acceptable Foreign Trade Reporting Facilities (2017 Proposed Amendments).  All relevant background information, including the description and impact of the Amendments, is set out in these Notices.

We have not made any changes to the 2017 Proposed Amendments.

The Amendments are effective on November 7, 2018.

Comments Received

We received one comment letter in response to IIROC Notice 17-0111. Appendix B provides a summary of the public comments received and our responses. 

On December 15, 2014, IIROC published guidance on the definition of FORM (FORM Guidance).  The FORM Guidance reminded Participants that trading “off-marketplace” must be in compliance with UMIR 6.4 and, specifically, that a Participant who relies on the UMIR 6.4(2)(d) exemption to execute trades in listed securities “off-marketplace” must execute the trades on a FORM.

IIROC received a comment that the 2017 Proposed Amendments do not address the FORM Guidance.  We note that the 2017 Proposed Amendments do not make any changes to the FORM definition and we expect each Participant to ensure that its executions outside of Canada comply with UMIR 6.4 requirements.

Attachments

Appendix A – Text of UMIR Amendments

Appendix B – Summary of comments received and IIROC’s responses

Implementation

The Amendments come into force on November 7, 2018, being 90 days after the publication of this Notice.