Securities Law

BCN 2001/77 - Adoption of National Instrument 21-101 Market Operation Rule, National Instrument 23-101 Trading Rules and related documents [BCN - Rescinded]

Published Date: 2001-11-01
Effective Date: 2001-11-01
Related Document(s):

The members of the Canadian Securities Administrators (CSA) have adopted, effective December 1, 2001, the following instruments and policies, which we call the “ATS Rules”:

  • National Instrument 21-101 Market Operation Rule, Forms 21-101F1, 21-101F2, 21-101F3, 21-101F4, 21-101F5 and 21-101F6, and Companion Policy 21-101CP, and
  • National Instrument 23-101 Trading Rules and Companion Policy 23-101 CP.

The text of the Market Operation Rule (B.C. Reg. 251/2001) and the Trading Rules (B.C. Reg. 252/2001) is attached.

Background
We first published the ATS Rules for comment on July 2, 1999 (NIN#99/24) and, after considering the comments and making changes, republished them on July 28, 2000 (NIN#2000/33). We considered the second round of comments and made some further non-material changes, and we published an advance notice of the adoption of the ATS Rules on August 17, 2001 (BCN 2001/60).

Purpose of the ATS Rules
The ATS Rules set out a scheme for regulating alternative trading systems by giving them a choice about how they will be regulated. The ATS Rules attempt to minimize fragmentation by setting out requirements for order and trade reporting, information consolidation, and market integration.  In addition, the ATS Rules are designed to maintain and improve market integrity through the Trading Rules.

Other Documents Affected
We have amended BCI 21-501 Recognition of exchanges, self-regulatory bodies and jurisdictions to recognize the Bourse de Montréal Inc. and The Toronto Stock Exchange Inc. for purposes of National Instrument 21-101 and National Instrument 23-101. We have also made non-substantive housekeeping amendments to the instrument. The amendments are effective December 1, 2001. The text of amended BCI 21-501 is attached.

Foreign ATSs
In the past, foreign ATSs have been allowed to operate in British Columbia as securities dealers under specific terms and conditions of registration. On December 1, 2001, a foreign ATS will not be allowed to carry on business as an ATS in British Columbia unless it becomes registered under the Act as an investment dealer and becomes a member of the Investment Dealers Association of Canada. Staff encourages foreign ATSs that have concerns about being able to complete this process by December 1, 2001 to contact us to discuss business continuity alternatives.

ATS Rules and the Fixed Income Market
Part 8 of National Instrument 21-101 provides that the information processor will set the information transparency requirements for the unlisted fixed income market. The detailed market transparency requirements will be finalized after discussion with the CSA. We anticipate that the information processor will initially receive the following information for government debt securities and investment grade corporate debt securities:

  • for a trade with a par value of $2 million or less, the actual volume of the trade; and
  • for a trade with a par value over $2 million, the volume shown as “$2 million +”.

The information processor will provide information vendors this information for a list of benchmark, liquid government and corporate debt securities identified by the information processor in consultation with industry participants according to transparent criteria established by the information processor.

Questions
Please refer questions to:

Robert J. Hudson
Manager, Capital Markets Regulation
British Columbia Securities Commission
(604) 899-6691
(800) 373-6393 (in B.C. or Alberta)
rhudson@bcsc.bc.ca, or

Louyse Gauvin
Special Advisor to the Chair
British Columbia Securities Commission
(604) 899-6538
(800) 373-6393 (in B.C. or Alberta)
lgauvin@bcsc.bc.ca

November 1, 2001

 


Douglas M. Hyndman
Chair


Ref: NIN#99/24
 NIN#2000/33
 BCN2001/60

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.