23-301 Electronic Audit Trails [CSA Staff Notice]

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23-301 [CSA Staff Notice]
Published: 2003-03-27
Effective: 2003-03-27

Under Part 11 of National Instrument 23-101 Trading Rules (NI 23-101), dealers must maintain certain records relating to orders and trades. As of December 31, 2003, these records must be maintained in electronic form. NI 23-101 also requires that the dealer transmit to a regulation services provider (RSP) the information as required by the RSP.[1]

 

Market Regulation Services Inc. (RS) is the RSP for the Toronto Stock Exchange, TSX Venture Exchange, and a number of alternative trading systems. RS administers the Universal Market Integrity Rules (UMIR). Section 10.11 of UMIR requires dealers to maintain certain information relating to orders and trades.[2]

 

Bourse de Montréal Inc.(Bourse) is, through its Regulatory Division, the RSP for its own market. The Regulatory Division administers the application of Rule 6 of the Bourse which concerns trading in the derivatives instruments listed on the Bourse, such as equity options and futures contracts and options. Article 6377 of Rule 6 requires approved participants of the Bourse to maintain certain information relating to orders entered and trades executed in the trading system of the Bourse.

 

Canadian Securities Administrators’ Staff (CSA Staff), RS, the Investment Dealers Association (IDA), and the Bourse are working together to determine the implementation plan for the electronic audit trail and the transmission requirements. To this end, we will take the following steps:

 

1.   RS and the Bourse will determine

 

·      what data should be transmitted to each of them for market regulation purposes,

·      by whom, and

·      the frequency of the transmission

 

2.   A consultation committee will be established in April to determine if there is a need to establish any joint technology standards to facilitate the implementation of the electronic audit trail requirements.

 

3.   A survey will be sent to all relevant market participants to determine their readiness to implement an electronic audit trail and their ability to transmit this data electronically. A report will be made by June 2003.

 

4.   After the evaluation of the survey results, the CSA Staff, RS, the Bourse, and the IDA will issue an implementation plan. The implementation plan will deal with both the electronic audit trail and the electronic transmission of data.

 

The Mutual Fund Dealers Association of Canada will be issuing a separate notice relating to the requirements in NI 23-101.

 

Questions

 

Please refer your questions to any of the following people:

 

Ian Kerr

Legal Counsel

Alberta Securities Commission

Phone: (403) 297-4225

E-mail: ian.kerr@seccom.ab.ca

 

Veronica Armstrong

Senior Policy Advisor, Legal and Market Initiatives

British Columbia Securities Commission

Phone: (604) 899-6738

E-mail: varmstrong@bcsc.bc.ca

 

Tracey Stern

Senior Legal Counsel, Market Regulation

Ontario Securities Commission

Phone: (416) 593-8167

E-Mail: tstern@osc.gov.on.ca

 

Ann Leduc

Chef du service de la réglementation

Commission des valeurs mobilières du Québec

Phone:(514) 940-2199 ext. 4572

E-mail: ann.Leduc@cvmq.com

 

Noelle Wood

Senior Counsel

Market Surveillance

Market Regulation Services Inc.

Phone:  (416) 646-7275

Fax: (416) 646-7265

E-mail: Noelle.Wood@regulationservices.com


 

Keith Rose

Vice-President, Regulatory Policy

Investment Dealers Association

Phone: (416) 943-6907

Fax:     (416) 943-6760

E-mail: krose@ida.ca

 

Jacques Tanguay

Vice-President, Regulatory Division

Bourse de Montreal Inc.

Phone: (514) 871-3518

Fax:  (514) 871-3567

E-mail:jtanguay@m-x.ca



[1]For the text of NI 23-101, please see Rules and Regulations section of OSC website: www.osc.gov.on.ca.

[2]For the text, please see RS’s website: www.regulationservices.com