IIROC has issued for comment proposed amendments to the trading rules relating to third-party electronic access to marketplaces and complementary draft guidance.

Today’s proposed rule changes build on electronic trading provisions proposed by IIROC in June 2012 by providing a framework to govern three distinct types of third-party electronic access:

  • order execution services to retail clients (often referred to as “discount brokerage”);
  • direct electronic access (or “DEA”) granted to institutional and other appropriate clients (including what is often called “direct market access”); and
  • routing arrangements between dealers.

These proposals introduce specific requirements regarding standards, agreements, training, assignment of identifiers, supervision and gatekeeping for the three distinct types of third-party electronic access.

“These reforms will bolster market integrity at a time when new high-speed trading technologies are introducing added risks. They accomplish this objective by ensuring there are proper controls in place for all trading activity regardless of source,” said Susan Wolburgh Jenah, IIROC’s President and Chief Executive Officer.

Also today, the Canadian Securities Administrators issued notice of proposed amendments to National Instrument 23-103 Electronic Trading to include provisions on DEA to marketplaces.

The deadline for comments on the IIROC draft guidance and proposed rule amendments is January 23, 2013.

Read the full details here.