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Oct 25, 2012
The Canadian Securities Administrators (CSA) announced today it is seeking feedback on proposed amendments to NI 23-103 Electronic Trading (NI 23-103), which would provide a framework for the provision of direct electronic access (DEA).
NI 23-103 outlines the risk and supervisory policies, procedures and controls that must be put in place for dealers to manage the risks associated with electronic trading, including the use of algorithms and high frequency trading. NI 23-103 will be implemented on March 1, 2013.
The proposed changes introduce a framework for the provision of DEA, a critical piece in managing the risks of electronic trading. The proposed DEA provisions include standards for DEA clients, written agreements and a requirement for adequate training.
“Today’s proposals are an important step in establishing a framework for direct electronic access and greater controls to mitigate and manage the risks created by high-speed automated trading,” said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission. “As technological innovations evolve, it is imperative that securities regulators continue to focus on this area in order to maintain fair and efficient capital markets in Canada.”
The proposed DEA amendments were initially published for comment in April 2011, but were not finalized with NI 23-103 in order to develop CSA requirements that are complemented by the Investment Industry Regulatory Organization of Canada’s (IIROC) Universal Market Integrity Rules (UMIR). IIROC published amendments to UMIR today which include amendments relating to DEA and to trading by dealers through other dealers.
Investors and market participants are encouraged to submit comments on the proposed amendments by January 23, 2013. For more information visit the websites of the CSA members.
The CSA, the council of the securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.
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