Canada to introduce risk control obligations
The Canadian Securities Administrators (CSA) wants to implement a new regulatory framework for electronic trading in the
country, designed to help reduce systemic risk, by 1 March 2013.
The framework aims to address concerns over the speed and
automation of trading in Canadian markets and ensure marketplaces and
participants actively monitor and manage these risks. Under the new
rules, market participants will be required to
maintain policies, procedures and controls to manage the risks associated with
accessing the markets electronically.
The CSA said the new measures were designed to bring Canada into line with
international approaches to regulating electronic trading.
“Establishing the right regulatory framework to oversee and
manage the risks of electronic trading is a priority for the CSA,” said Bill
Rice, chair of the CSA and chair and CEO of the Alberta Securities Commission.
“The regulatory obligations in this new rule provide better protection for
investors and support the integrity of Canada’s capital markets by outlining
the obligations required when participating in this activity.”
The CSA is
the council of the securities regulators of Canada’s provinces and territories.
Its role is to coordinate and harmonise regulation for the Canadian capital
Earlier this month, the CSA put out a consultation
paper, outlining the
agency’s recommendations for clearing of OTC derivatives transactions through
regulated central counterparties, which may grant Canadian investment watchdogs
the power to force certain OTC derivatives to be centrally cleared as part of
the country’s drive to meet its G-20 commitments.