GOAL THREE – DELIVER EFFECTIVE AND EXPERT REGULATION



What we did
Worked to improve the regulatory reporting process for IIROC-regulated firms.
How we did it
Developed IIROC Services, a secure website portal that is easy to navigate and provides streamlined access to all IIROC regulatory reporting applications. The new portal was launched in April 2015 and provides IIROC-regulated firms with a secure single point of access to manage their firms’ regulatory reporting requirements.
Why it matters
The portal enables IIROC-regulated firms to efficiently and securely fulfill their regulatory reporting requirements.

Improved effectiveness and efficiency of compliance examinations at member firms.
Continued to streamline our integrated compliance examinations, where two or more exams (Business Conduct Compliance, Financial and Operations Compliance, and Trading Conduct Compliance) are coordinated and one combined report is issued, as noted in Goal One.
Helps IIROC staff and member firms better utilize firm and compliance department resources, which results in more cost-effective outcomes.

Continued to proactively mine market data for research and conduct analysis.
Substantially completed the build of an Analytics Factory, a utility that enables IIROC to derive meaningful metrics and insights utilizing IIROC’s trading dataset.

Initiated the design and build of a web interface designed to provide IIROC users with self-service access to metrics built on IIROC’s dataset.

In September 2014, published a study, “Identifying Trading Groups – Methodology and Results”, which described the use of machine learning techniques to identify different market participants.

Provided the CSA with monthly market activity dashboards to help monitor trends.
Analyzing emerging trends helps IIROC and other regulators anticipate potential issues and informs the appropriate regulatory response in a rapidly changing market environment.

Continued to study the impact of High Frequency Trading and related market activities.
Selected four academic teams, based on their extensive international experience in researching high frequency trading (HFT), algorithmic trading and other market structure issues.

Published four of five scheduled academic papers which examined:

  • the behaviour of high frequency traders during times of market stress, using the execution of large institutional trades as a proxy
  • the role of HFT in liquidity provision, risk management and information transmission across multiple trading venues
  • the effects of the relaxation of short sale restrictions on market liquidity, stability, and price discovery on Canadian securities markets
  • the effects of the introduction in October 2012 of new requirements regarding the execution of dark orders on Canadian securities markets
Empirical data and objective study, combined with IIROC’s internal work, will help to inform any further policy making or regulatory interventions that may be required.

Continued to focus on setting high proficiency standards for IIROC registrants.
In anticipation of the expiry of IIROC’s exclusive proficiency services agreement with the Canadian Securities Institute in January 2016, began a process to evaluate whether the existing proficiency assurance model or another approach would best serve the public interest and meet IIROC’s regulatory needs, as well as the industry’s needs going forward.

Published a consultation paper in July 2014 and held regional consultation roundtables to engage stakeholders in IIROC’s consideration of proficiency assurance alternatives. IIROC has reviewed the input and is analyzing the feedback and options to inform the next phase of IIROC’s proficiency assurance model.

Completed a multi-year initiative to evaluate and improve proficiency training for approved persons in the institutional segment of the market.
High proficiency standards play a key role in investor protection and capital markets integrity and efficiency.

Enhanced relationships with other domestic and international regulators and law enforcement organizations.
Maintained ongoing dialogue with, and provided leadership on issues to international regulators, through the International Organization of Securities Commissions, Intermarket Surveillance Group (IIROC staff is current chair of ISG), the International Forum for Investor Education and other forums, to share expertise, best practices and market intelligence.
Awareness of global developments is essential to harmonizing regulatory approaches, where appropriate, while setting standards for the Canadian context.

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