Housekeeping amendments to UMIR Following Implementation of IIROC Rules

20-0042
Type: Rules Notice> Approval/Implementation
Rule connection:
UMIR
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Contact:

Theodora Lam
Senior Policy Counsel, Market Regulation Policy
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Executive Summary

On January 29, 2020, IIROC’s Board of Directors approved housekeeping amendments (Amendments) to the following provisions of the Universal Market Integrity Rules (UMIR):

  • UMIR 1.1 – Definition of “order execution service”
  • Subparagraph (a)(iv) of subsection 6.2(1) – Designations and Identifiers
  • Part 5 of Policy 6.4 – Application of UMIR to Orders Not Entered on a Marketplace
  • Part 3 of Policy 7.1 – Supervision and Compliance Procedures for Trading on a Marketplace
  • Part 4 of Policy 7.1 – Specific Procedures Respecting Client Priority
  • Part 1 of Policy 8.1 – General Requirements for Client-Principal Trading
  • Paragraph (e) of subsection 10.16(1) – Gatekeeper Obligations of Directors, Officers and Employees of Participants and Access Persons.

The Amendments replace rule references to the Dealer Member Rules with provisions of the IIROC Rules1 as follows:

  • Dealer Member Rule 3200 – Minimum Requirements for Dealer Members Seeking Approval under Rule 1300.1(t)  to offer an Order-Execution Only Service with Part D of IIROC Rule 3200 – Order Execution Only Accounts in the definition of “order execution service” of UMIR 1.1
  • Dealer Member Rule 3200 with IIROC Rule 3241 in paragraph (1)(a) of section 6.2
  • Dealer Member Rule 3300 with Part C of IIROC Rule 3100 – Best Execution of Client Orders in Part 5 of Policy 6.4, Parts 3 and 4 of Policy 7.1, Part 1 of Policy 8.1, and paragraph (e) of subsection UMIR 10.16(1).

The Amendments will become effective on June 1, 2020.

  • 1. IIROC Notice 19-0144 – Rules Notice – Notice of Approval/Implementation – Implementation of IIROC
    Dealer Member Plain Language Rule Book (August 22, 2019).
Table of contents
  1. Discussion of the Amendments

Analysis

The Canadian Securities Administrators approved the plain language rewrite of the Dealer Member Rules (collectively as the IIROC Rules) on August 22, 2019. As a result, we need to make housekeeping changes to UMIR to update rule references from the previous Dealer Member Rules with the current provisions in IIROC Rules.

Classification of the Amendments

We have classified the Amendments as “housekeeping” because they:

  • do not represent a material change to IIROC rules
  • have no material impact on investors, issuers, Participants or the capital markets in Canada as they:
    • correct inaccurate cross-referencing and typographical mistakes
    • make necessary changes of an editoral nature.
  1. Impacts of the Amendments

We do not expect the Amendments to impact any stakeholders.

Technological implications

We do not expect the Amendments to impact a Participant’s systems or the systems of its service provicers.

  1. Policy Development Process

Regulatory purpose

The Amendments maintain rules that are necessary or appropriate to govern and regulate all aspects of IIROC’s functions and responsibilities as a self-regulatory entity.

In deciding on the Amendments, IIROC identified a need to ensure UMIR is up-to-date by correcting inaccurate cross-referencing and typographical mistakes.

The Amendments are housekeeping in nature and not detrimental to the best interests of the capital markets. As a result, the Board has classified the Amendments as a “Housekeeping Rule” that is not contrary to the public interest.

  1. Attachments

Attachment A – Text of Amendments to UMIR

Attachment B – Blacklined text of UMIR to reflect the Amendments