Debt market requirements 

Type: Rules Notice> Guidance Note
Rule connection:
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Member Regulation Policy

Executive Summary

Effective Date: December 31, 2021 

IIROC Rule 71001 describes the standards for trading by market participants in debt markets. This rule was developed by IIROC in consultation with the Bank of Canada to ensure the integrity and well-functioning Canadian debt markets and thereby to encourage liquidity, efficiency and the maintenance of active trading and lending and promote public confidence in these markets. 

IIROC and the Canadian Securities Administrators (CSA) also have rules and standards that apply to domestic secondary market trading carried out by IIROC Dealer Members (Dealers). Rule 7100 provides further amplification and, in some cases, broader application of these rules in relation to debt markets. Dealers that are Primary Dealers and/or Government Securities Distributors and that are eligible to bid in Government of Canada securities auctions are also subject to the Government of Canada’s Terms of Participation in Auctions for Government Securities Distributors and must observe their administrative and reporting procedures. 

  • 1In this Guidance, all rule references are to the IIROC Rules unless otherwise specified.
  1. Application 

While Rule 7100 applies directly only to Dealers and their related companies, which play an active and integral role in Canadian debt markets, this code of conduct should also guide the actions of all other market participants in these markets. Dealers should promote the standards established in this Rule to their affiliates, clients, and counterparties. In particular, market participants may be required to cooperate in reporting and making certain disclosures, and Dealers should conduct their business in a manner that will encourage these affiliates, clients and counterparties to comply with Rule 7100. 

Rule 7100, together with applicable securities legislation, the auction rules and Terms of Participation for Government Securities Distributors, will ensure proper conduct of market participants during auctions of Government of Canada securities as well as in other primary and secondary debt markets. It will result in the close coordination between federal authorities, the CSA, Dealers and IIROC in the exchange of detailed market information and the enforcement of proper market conduct. 

  1. Regulatory sanctions 

Dealers that do not comply with IIROC requirements could face sanctions from IIROC and also from the Government of Canada, Department of Finance (Canada) and provincial securities regulatory authorities. In the case of Government of Canada securities, this could include the Bank of Canada suspending or removing eligible-bidder status for auctions of Government of Canada securities. 

  1. Applicable Rule 

IIROC Rules this Guidance Note relates to: 

  • Rule 7100. 

  1. Previous Guidance Note 

This Guidance Note replaces draft Guidance Note 7200-1, published as Attachment D to Notice 11-0164 – Plain language rule re-write project – Debt Markets and Inter-Dealer Bond Brokers.  

  1. Related documents  

This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.

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