The Investment Industry Regulatory Organization of Canada has published a new debt transaction reporting rule that will take effect in November 2015.
Under the new framework, dealer members will be required to report, on a post trade basis, all debt security transactions made by them and/or their affiliates that are deemed government securities distributors.
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The framework has been approved by the Canadian Securities Administrators, so by November 2015, it’s expected more than 90% of dealer member debt trading activity will be subject to IIROC oversight.
The rule is crucial since participation in the debt market by institutional and retail investors has increased significantly in recent years, with the value of bond trading in Canada in 2013 estimated to be $11.9 trillion, compared with $1.95 trillion in equity markets.
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“We recognize fixed income plays an important role in helping investors achieve their financial goals,” says Susan Wolburgh Jenah, IIROC President and CEO.
Also, a Market Trade Reporting System will facilitate the collection and analysis of detailed debt trade reports.
IIROC has worked cooperatively with the Bank of Canada to develop the new system, which will run in parallel to the existing MTRS program for a short period of time to ensure data integrity.
Consistent with current practice, IIROC will continue to publish only aggregate debt trading statistics. Also, with the assistance of an industry working group, IIROC is developing a proposed cost-recovery fee model that will be published by IIROC for comment by the end of this year.