IIROC proposes guidance on stop-loss order handling

By Staff | April 15, 2013 | Last updated on April 15, 2013
1 min read

The Investment Industry Regulatory Organization of Canada has issued proposed guidance on the management of stop-loss orders.

It’s noted a number of recent circumstances where the executions of stop-loss orders—including those from discount brokerage accounts—have required IIROC intervention to either vary or cancel the trades.

Read: 10 tips for placing ETF orders

The proposed guidance aims to reduce disruptions to fair and orderly Canadian markets. IIROC confirms dealers’ obligations under the UMIR electronic trading rule amendments, which took effect March 1, 2013. These apply the entry of stop-loss orders and the execution of triggered orders.

“Equity trading is becoming [more] automated and complex, [so] it’s important that all participants take responsibility for the integrity of the markets,” says IIROC president and CEO Susan Wolburgh Jenah. “Regulatory intervention by IIROC should be required only in exceptional circumstances.”

IIROC will continue monitoring the impact of stop-loss orders on markets, will assess what additional regulatory steps are required.

Read: Faceoff: Coping with volatility, which mentions how these orders are used

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.