Order Protection Rule amendments proposed by CSA and IIROC

June 15, 2015

On June 12, 2015, the Canadian Securities Administrators (CSA) proposed amendments to the Companion Policy to NI 23-101 Trading Rules. The proposed amendments to the Companion Policy would reflect the CSA's view that where a marketplace has implemented systematic order processing delays (commonly referred to as "speed bumps"), none of the orders on that marketplace would be considered "protected orders". In cases where a marketplace operates more than one market or facility and imposes speed bumps on orders entered on some marketplaces, the proposed amendments would only apply to the market or facility on which the order processing delay is imposed.

The proposed amendments follow announcements by Aequitas NEO Exchange and the TMX Group's Alpha Exchange that they would implement speed bumps in their marketplaces to address high frequency trading. The CSA amendments were developed jointly with IIROC which proposed amendments to the Universal Market Integrity Rules that would clarify the interpretation of a protected order.

The CSA proposed amendments are the next phase of a multi-year consultation process beginning with the CSA's May 2014 proposal. For further information, please consult the CSA Notice and Request for Comment and IIROC Notice 15-0129. IIROC will be accepting comments on the proposed amendments until July 13, 2015 and the CSA will be accepting comments on the proposed amendments until August 17, 2015.

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