CANADA: Implementation of the Market Share Threshold and Amendments to Companion Policy Trading Rules

Tuesday June 21 2016

The Canadian Securities Administrators (CSA) has published CSA Staff Notice Order Protection Rule for the implementation of the market share threshold and amendments to companion policy 23-101 trading rules, which lists marketplaces that will be considered unprotected for the purposes of the order protection rule (OPR) in National Instrument 23-101 Trading Rules.

The notice is related to the notice of amendments to NI 23-101 and its related Companion Policy, published on April 7, 2016, which introduced a market share threshold intended to provide flexibility to market participants in determining if and when to access trading on certain marketplaces. The amendments also clarify the meaning of automated trading functionality with respect to marketplaces that impose intentional order processing delays. This approach is consistent with the policy underpinnings of the OPR framework and is not an endorsement or criticism of systemic order processing delays.

Subject to Ministerial approvals, as of July 6, 2016, certain marketplaces will be considered unprotected if they do not provide automated trading functionality as they have an intentional order processing delay, also known as a speed bump.

Additionally, subject to Ministerial approvals, as of October 1, 2016, other marketplaces will be considered unprotected should they not meet a market share threshold set by the regulators at 2.5 per cent of total value and volume traded.

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