IIROC releases summary of exemptive relief granted in 2014

March 20, 2015

Earlier this week, IIROC released a summary of the 600+ exemptions from the Dealer Member and Universal Market Integrity Rules it granted during 2014

While most of the exemptive relief was granted to individuals in respect of IIROC proficiency requirements (436 exemptions), 120 exemptions were also granted from specified provisions of the Universal Market Integrity Rules (UMIR) and 47 exemptions were granted in respect of the Dealer Member Rules.

The exemptions from the UMIR provisions included 84 exemptions in response to requests by Participants to act as principal or agent in off-marketplace trades. While the UMIR generally require all trades to be made on a marketplace, there are enumerated exceptions and the ability to seek regulatory exemptions outside of those enumerated circumstances. According to the report, such regulatory exemptions were granted in the following categories:

  • trades of securities subject to a hold period under securities laws;
  • trades by participants taking on a significant block at a discount to the prevailing market price with the intention of immediately attempting to distribute the securities;
  • the purchase of securities under the private agreement exemption from the take-over bid rules;
  • sales from control block shareholders;
  • trades made pursuant to exempt issuer bids;
  • trades of securities subject to a non-regulatory trading halt; and
  • trades in an illiquid security at a nominal value where there was no current bid for the security.

The UMIR exemptions also included 36 exemptions in relation to the UMIR definition of “Basis Order” where a Participant sought to execute a trade in an exempt ETF as a Basis Order at a price derived from the execution of the underlying securities of the ETF.

Relief from the Dealer Member Rules provisions included 38 exemptions related to the current margin requirements applicable to certain cash and security borrowing and lending arrangements, two exemptions related to cross-guarantee provisions and seven exemptions related to bulk account transfers. The report notes at page 8 that 449 applications for an exemption from the IIROC proficiency requirements were made in 2014 and approval for the exemption was granted in 436 cases.

For more information, see IIROC Notice 15-0068.

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