CANADA: Canadian Securities Regulators Establish Regulatory Framework to Manage Risks Associated With Direct Electronic Access

Friday July 5 2013

The Canadian Securities Administrators (CSA) today announced that it has issued amendments to National Instrument 23-103 Electronic Trading (NI 23-103), which will establish a consistent framework for the offer and use of direct electronic access (DEA) and address the financial and regulatory risks associated with DEA. NI 23-103 requires appropriate controls to ensure the integrity of dealers that offer DEA and the market as a whole.

The CSA first published NI 23-103 for comment in April 2011, proposing requirements to address the risks to Canadian markets related to the speed and automation of electronic trading, including the risks related to DEA. NI 23-103 was finalized in June 2012 without the DEA-related provisions to allow the CSA sufficient time to align these requirements with amendments to the Investment Industry Regulatory Organization of Canada’s (IIROC) Universal Market Integrity Rules, which are also being published today.

The amendments were developed following consultations with marketplaces, marketplace participants and service vendors, and are consistent with international approaches to regulating direct electronic trading. The CSA acknowledges and thanks IIROC staff for their work on this initiative.

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