Thursday March 24 2016

News Source: Global Exchanges

Focus: Trading Rules

Type: General




Bourse de Montréal has undertaken a project to update and modernize its Rules. This project seeks to review the structure of the Rules, unify procedures into the Rules, remove outdated articles, align the Rules with current practices, and recommend substantive amendments as appropriate to adapt the Rules to the evolution of the market. The Bourse has identified a number of amendments which are intended either to update the Rules, align the Rules with current practices or to implement best practices. The proposed amendments are based on benchmarking with the rules and practices of other exchanges. In addition, the Bourse has sought preliminary and informal comments from industry and regulatory stakeholders before drafting the proposed amendments.

The Rules and Policies Committee of Bourse de Montréal Inc. has approved the introduction of articles 6024 and 6376A and amendments to articles 6392 and 6633 of the Rules of the Bourse, and the Special Committee of the Regulatory Division of the Bourse has approved the introduction of article 6024, in order to clarify the Rules and align the Rules with current Bourse practices.

New article 6024 (Suspension of trading)

Article 6024 will authorize the Bourse, though the Vice President of the Regulatory Division, to take summary action to suspend the trading privileges of an approved participant and cancel pending orders with regard to certain products upon the suspension or default of its clearing approved participant. This article will also provide the circumstances under which the trading privileges of an approved participant may be reinstated. This proposed rule will ensure that the Bourse is able to take timely action in the event that an approved participant’s clearing member is no longer able to guarantee such trades. The ability to act promptly in this type of scenario lowers the possibility or degree of possible market disruption.

New article 6376A (Open or close transaction indication)

Article 6376A will clarify the instances where the use of the open/close indicator field at the input of order is mandatory. Such indication will be mandatory under certain circumstances such as trading for liquidation or when the approved participant is subject to an order from the Bourse to reduce positions. By making the inclusion of this indicator permissive at all other times, the Bourse will reduce the possibility of approved participants inadvertently violating a reporting requirement that is relevant only in those instances when it is being required.

Article 6392 (Opening Time)

Article 6392 provides that the opening of trading for various types of trading strategies may be no earlier than the opening for the Listed Product. The proposed amendment to article 6392 updates the rule to bring it into alignment with current practice on the Bourse by replacing the words “spread or strip” with “strategy.” to provide for a broader application of the article.

Article 6633 (Members’ Responsibility on Spread Orders)

It has been proposed to repeal article 6633 because it addresses conditions as they existed prior to electronic trading.

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