IIROC published proposed guidance to expand the single-stock circuit breaker program to further mitigate market volatility. It’s looking for industry comment on its proposal.
The guidance would:
- expand the list of securities subject to SSCBs to include all securities that are considered “actively traded”
- extend the times when SSCBs are active to include the entire regular trading day
- allow more than one SSCB to trigger for a particular security during the same trading day
Read: IIROC issues notice on market circuit breakers
Under the proposal, IIROC would produce a report, available on its website, listing all securities subject to SSCBs. It would be updated monthly once the guidance is finalized.
Read: IIROC’s top audit targets in 2014
The introduction and expansion of SSCBs is part of a series of IIROC reforms implemented since the May 6th 2010 “Flash Crash”. They include:
- controls at the participant level introduced through the electronic trading rules (March 2013) and pending implementation of third-party marketplace access rules (March 2014)
- an upcoming proposal for the introduction of marketplace thresholds
- IIROC’s February 2013 update to market-wide circuit breakers
- IIROC’s August 2012 clarification of its policies and procedures on erroneous and unreasonable trades
The proposed guidance, when finalized, would replace prior guidance published February 2012 in which IIROC introduced SSCBs on an “initial implementation phase” basis. The proposal is out for comment until March 10, 2014.