CANADA: CSA outlines enhancements for regulation of the fixed income market

Monday April 25 2016

The Canadian Securities Regulators (CSA) have outlined the next steps in the implementation of enhancements for regulation of the fixed income market.

The objectives of the CSA’s fixed income regulation plan are to improve market integrity, facilitate more informed decision-making among market participants and evaluate access to the fixed income market. Increasing transparency in the corporate debt market is a key element of this plan, and the CSA is working with the Investment Industry Regulatory Organization of Canada (IIROC) to achieve this goal.

Over the longer term, CSA and IIROC will review fixed income trading activity, as well as the appropriateness of the initial dissemination delay (two days after a trade is executed, or T+2) and the volume caps to determine whether they continue to be appropriate or need to be changed.

A review of dealers’ practices regarding new issue allocations is also a part of the fixed income regulation plan. Its objectives are to determine what, if any, regulatory action is needed in this area, in light of concerns raised by some market participants about their ability to participate in new debt offerings. Staff also intend to seek input from buy-side participants on their experience participating in new issues of fixed income securities.

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