Canada's national self-regulatory body issues new guidance and educational resources on extended hours trading risks
The Canadian Investment Regulatory Organization (CIRO) is urging investors across Canada to fully understand the risks of trading outside regular market hours before placing any orders during extended sessions.
The self-regulatory organization has published new educational content alongside a guidance note clarifying compliance obligations for dealers operating during extended hours sessions.
Equity marketplaces in Canada run regular trading hours from 9:30 a.m. to 4 p.m. ET, when all marketplaces are open simultaneously. Extended hours trading allows investors to buy and sell securities before or after that window, with certain marketplaces making those additional sessions available.
While the flexibility can appeal to investors looking to react quickly to market-moving events, CIRO is emphasising that the conditions during extended sessions can differ substantially from those in the core trading day.
"Having the ability to trade outside regular trading hours may provide additional investor flexibility and sound appealing, but the same factors that create opportunity can also create risk," said Kevin McCoy, Senior Vice-President, Market Regulation, CIRO. "Before placing a trade outside of regular trading hours, investors should understand how trading conditions can differ and how those differences may affect the price of securities they buy or sell."
Risky aspects of extended hours sessions
The regulator identifies several key characteristics of extended hours sessions that investors should weigh carefully. Lower trading volume and reduced liquidity are among the primary concerns, as fewer participants in the market can lead to wider bid-ask spreads and trade prices that diverge meaningfully from those available during regular hours. Greater price volatility is also more common, particularly in response to earnings releases, economic data, or breaking news that surfaces after the closing bell.
CIRO is also directing investors to consider which order types are most appropriate during low-liquidity periods. In extended sessions, where spreads are typically wider, certain order types — particularly limit orders — can offer investors greater control over the price at which their trades are executed, compared to market orders that may fill at unexpected prices.
The move follows a period of growing interest in extended hours access across Canadian markets. As CIRO's fiscal 2027 agenda signals further market regulation transparency, the regulator's investor education output has become an increasingly visible part of its public mandate.
The guidance note released alongside the educational materials makes clear that CIRO's rules apply equally during extended hours sessions as they do during the core trading day. Dealers are obligated to comply with all applicable requirements - including CIRO rules, marketplace rules, and relevant securities legislation - regardless of when a trade is placed. This is not new regulation, but a formal restatement of existing obligations for the industry's benefit.
What advisors should focus on
Advisors should also note that extended hours trading is not universally available. Not all investment dealers offer access to pre-market or after-hours sessions, and the product may not be suitable for every client. CIRO requires dealers that do offer extended hours access to provide clients with clear disclosure about the associated risks before they participate.
For financial advisors working with clients who actively trade, or who may seek out these sessions following market events, the new CIRO resources offer a practical reference point for client conversations. Understanding how a client's orders will be handled, and what conditions they may encounter, is central to the suitability analysis advisors are obligated to conduct.
As CIRO's fiscal 2026 enforcement actions highlight the regulator's continued focus on dealer compliance, this latest guidance reinforces that compliance obligations do not pause when the main session closes. Dealers and their registered representatives are expected to apply the same diligence during extended sessions as at any other time.
CIRO's new investor education resources are available at ciro.ca and cover both the potential advantages and the risks of trading outside regular hours.
Advisors working with clients on investment strategy should also be aware that, as CIRO's work on order execution-only guidance evolves in 2026, the broader context of how client orders are handled across different session types is under active regulatory focus.
