Amendments Respecting Trading Supervision Obligations

17-0189
Type: Rules Notice> Approval/Implementation
Rule connection:
UMIR
7.1 Trading Supervision Obligations
7.13 Direct Electronic Access and Routing Arrangements
Distribute internally to:
Institutional
Legal and Compliance
Senior Management
Trading Desk
Retail

Contact:

Sanka Kasturiarachchi
Policy Counsel, Market Regulation Policy
Telephone:
Email:

Executive Summary

On September 22, 2017, the applicable securities regulatory authorities approved amendments to UMIR 7.1 and 7.13 (Amendments).  The Amendments will:

  • remove the “Minimum Compliance Procedures for Trading Supervision” table (Minimum Supervision Table) in Policy Part 3 of UMIR 7.1
  • add new policies and requirements to address gaps created by the removal of the Minimum Supervision Table
  • remove the requirement to tailor order parameters of every automated order system used by a Participant or client to not exceed marketplace thresholds in Policy Part 8 of UMIR 7.1
  • add a new provision to UMIR 7.13 (3) (c) that would require client orders entered by an investment dealer or foreign dealer equivalent through a routing arrangement to be  subject to reasonable risk management and supervisory controls, as well as policies and procedures established and maintained by the investment dealer or foreign dealer equivalent.

The Amendments were published for comment on December 8, 2016 in IIROC Rules Notice 16-0287 – Rules Notice – Request for Comments – UMIR – Proposed Amendments Respecting Trading Supervision Obligations.  All relevant background information, including the description and impact of the Amendments, is set out in that notice.

No Comments Received

We did not receive any comment letters in response to IIROC Notice 16-0287.  We have not made any revisions to the Amendments, as set out in IIROC Notice 16-0287.

Attachments

Attachment A – Final amendments to UMIR 7.1 and 7.13

Attachment B – Text of UMIR to Reflect Amendments to UMIR 7.1 and 7.13

Implementation

IIROC expects that the most significant impacts of the Amendments on Participants would be to:        

  • review  their current supervision and compliance policies and procedures and modify them where necessary to ensure that they are appropriately designed to address compliance risks associated with their business models and the business lines in which they are involved
  • make  appropriate changes to comply with proposed changes to UMIR 7.13 (3) (c) by ensuring client orders entered by an investment dealer or foreign dealer equivalent under a routing arrangement are subjected to reasonable risk management and supervisory controls, as well as policies and procedures established and maintained by the investment dealer or foreign dealer equivalent.

The Amendments come into force on March 27,2018, being 180 days after the publication of this Notice.