The Investment Industry Regulatory Organization of Canada (IIROC) today published Final Guidance that expands the single-stock circuit breaker (SSCB) program.
The Guidance, which takes effect on February 2, 2015, expands the list of securities subject to SSCBs to include all securities that are considered “actively traded,” extends the times when SSCBs are active to include more core trading hours when all marketplaces are open, and allows more than one SSCB to trigger for a particular security during the same trading day.
SSCBs are a tool to further mitigate market volatility. Together with other complementary IIROC initiatives, the expansion of SSCBs helps maintain fair and orderly markets, and fosters investor confidence.
An SSCB triggers—resulting in a five-minute trading halt—in situations when a covered security experiences a significant and unexplained short-term price movement.
Under the Guidance, IIROC will produce and make available at www.iiroc.ca, a report listing all securities subject to SSCBs. The report will be updated monthly.
The introduction of SSCBs in February 2012 and their current expansion are part of a series of IIROC reforms implemented since the May 6, 2010 “Flash Crash.” These measures include:
- controls at the participant level introduced through the electronic trading rules (March 2013) and third-party marketplace access rules (March 2014);
- a proposal for the introduction of marketplace thresholds;
- IIROC’s February 2013 update to market-wide circuit breakers; and
- IIROC’s August 2012 clarification of its policies and procedures on erroneous and unreasonable trades.