Disclosure rules require that companies report all material information about their business and financial affairs to the public quickly and fairly. These rules aim to ensure that investors are given equal access to material information. IIROC monitors the timely disclosure of this information by companies trading on marketplaces that have retained IIROC as their regulation services provider. News releases issued by listed companies with material information are reviewed by IIROC surveillance staff before being released on the newswires or the company's website. If a news release is unclear or overly promotional, IIROC may ask the company to revise it. When surveillance staff believe that the information is material enough to impact the security (stock) price significantly, they might issue a temporary trading halt to allow the market to absorb the information properly. The reactivation of trading after a halt is called a trade resumption.
When a company fails to make timely disclosure of material information, the provincial securities regulators can issue a
Cease Trade Order (CTO), which stops the trading of the company's stock. Once issued, a CTO remains in effect until the company meets its disclosure obligations.
IIROC monitors various bulletin boards, blogs, chat rooms and social media sites on the internet. If surveillance staff notice erratic price moves in stocks, they might issue a trading halt and contact the issuer to see if it has information to explain the movement. We have no jurisdiction or legal authority to remove content from the internet, but staff may ask a company to issue a news release if they believe that material information is leaking into the market or if they believe rumours are affecting the stock price; however, we do not compel specific statements from companies. Public notices about halts and resumptions are on
our website and are disseminated over the newswire.
Suspected breaches of trading rules are escalated to IIROC's Trading Review and Analysis (TR&A) department for additional analysis. TR&A can conduct preliminary investigations if there is reason to believe that improper trading is occurring or has occurred and conduct post-trade reviews of trading to assess if there is activity that potentially violates trading rules, including market manipulation. When TR&A staff find evidence of a potential rule violation, the case is referred to IIROC's Enforcement department. Where IIROC identifies any potential violations of securities laws that fall outside its mandate, the matter is forwarded to the appropriate jurisdiction.