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Canadian Securities Regulators Proceed with Regulatory Framework to Manage Electronic Trading Risks

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The Canadian Securities Administrators (“CSA”) recently announced that following consultations with marketplaces, marketplace participants and service vendors, it is proceeding with the implementation of National Instrument 23-103 Electronic Trading and Direct Electronic Access to Market Places (the “Proposed Rule” or “NI 23-103”). The Proposed Rule establishes a regulatory framework for the oversight and management of potential risks associated with electronic trading in Canadian Market places, which, the CSA notes, is consistent with international approaches to regulating electronic trading.

NI 23-103 is designed to address the risks introduced by the speed and automation of electronic trading, and ensure that marketplaces and their participants are actively monitoring and addressing these risks. It will require, among other things, that participants in electronic trading implement and maintain certain controls, policies and procedures.

Subject to ministerial approval the policy will come into effect on March 1, 2013. Further information regarding the Proposed Rule can be found here on the OSC website.