The Investment Industry Regulatory Organization of Canada
(IIROC) has announced a consultation on ways to expand the use of client identifiers. The measure aims to enhance market integrity, protect investors, and address electronic trading risks while minimizing impact on the investment industry.
Under the initial proposal published by IIROC, client identifiers would be required on each order sent to a marketplace and each reportable trade in a debt security. Under the proposal, dealers would have to provide eligible clients (typically institutional clients) with a legal entity identifier (LEI); retail clients would be assigned an account number.
The added transparency will help IIROC and other Canadian regulators watch out for potential market abuses that threaten investors. Securities watchdogs in other global jurisdictions, such as Europe and the US, have required client identifiers to facilitate surveillance and investigation in financial markets.
“We have committed to an extensive consultation so we can achieve the regulatory objectives of the proposed changes in a cost-effective manner and with the least amount of impact,” said Victoria Pinnington, IIROC senior vice president for market regulation.
Comments are due by Nov. 13. A subsequent proposal will be published for additional comment before any proposed changes are implemented.
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