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 markets.
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.