Primary Listing Exchange Designation

21-0139
Type: Rules Notice> Guidance Note
Rule connection:
UMIR
1.1 Definitions
Distribute internally to:
Legal and Compliance
Senior Management
Trading Desk

Contact:

Sonali GuptaBhaya
Director, Market Regulation Policy
Telephone:
Email:

Executive Summary

IIROC is publishing guidance on:

  • use of the concept of “Primary Listing Exchange” in relation to UMIR
  • IIROC’s process in designating the Primary Listing Exchange for a listed security.

IIROC designates the first exchange on which a security is listed to be the Primary Listing Exchange for that security. If a security is listed on multiple exchanges simultaneously, IIROC will designate the exchange with the greatest percentage of overall trading volume in the previous year as the Primary Listing Exchange for that security.

  1. UMIR Requirements

Rule 1.2(5) of UMIR sets out the price of a security to be used for the purposes of determining the size of the “standard trading unit” for that security. Specifically, Participants must use the last sale price of the security on the immediately preceding trading day on the exchange on which the security is listed or the QTRS on which the security is quoted in order to determine the particular standard trading unit size for that security.

Where a security is listed on more than one exchange, we refer to the last sale price on the “Primary Listing Exchange” to determine the standard trading unit of that security.

Using the correct price in order to determine the standard trading unit of a security is essential for a Participant to comply with UMIR provisions that involve the concept of a standard trading unit, including:

  • Rule 6.3 Exposure of Client Orders
  • Rule 6.6 Provision of Price Improvement by a Dark Order
  • Rule 8.1 Client-Principal Trading.
  1. Designation of Primary Listing Exchange

  1. First Exchange on Which a Security is Listed

IIROC designates the first exchange on which a particular security is listed to be the Primary Listing Exchange.

Example I

Security ABC is listed on Exchange 1 on February 1, 2021.

Security ABC is listed on Exchange 2 on March 1, 2021.

Primary Listing Exchange Designation: Exchange 1

Rationale: IIROC would designate Exchange 1 as the Primary Listing Exchange for security ABC as the security was first listed on that exchange.

Example II

Security ABC is listed on Exchange 1 on February 1, 2021.

Security ABC is delisted from Exchange 1 on March 1, 2021.

Security ABC is listed on Exchange 2 on April 1, 2021.

Security ABC is re-listed on Exchange 1 on May 1, 2021.

Primary Listing Exchange Designation: Exchange 2

Rationale: IIROC would designate Exchange 2 as the Primary Listing Exchange because we would consider it to be the “first” exchange on which security ABC was listed given that this security was previously delisted from Exchange 1.

  1. Simultaneous Listings

In the case where a security is listed on multiple exchanges simultaneously, IIROC would designate the exchange with the greatest percentage of overall total trading volume in the previous year as the Primary Listing Exchange for that security.

Example III

Security ABC is listed on Exchange 1 and Exchange 2 on February 1, 2021 at the same time.

Exchange 1 had 40% overall total trading volume in 2020.

Exchange 2 had 15% overall total trading volume in 2020.

Primary Listing Exchange Designation: Exchange 1

Rationale: Given that security ABC was simultaneously listed on both exchanges, IIROC would designate Exchange 1 as the Primary Listing Exchange as it had the greater percentage of overall total trading volume in the previous year.

Should a situation arise that is not addressed above and there is uncertainty regarding the Primary Listing Exchange for a particular security, IIROC would publish a notice citing the designated Primary Listing Exchange for that security to eliminate confusion.