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IIROC Expands Single-Stock Circuit Breaker Program

par Andrew Rickard | July 14 2014 07:25AM

Effective February 2, 2015, all securities that are considered to be "actively traded" will be subject to the single-stock circuit breaker (SSCB) program.

The SSCB tool is used to mitigate market volatility. In situations when a covered security experiences a significant and unexplained short-term price movement, it triggers a five-minute trading halt. The Investment Industry Regulatory Organization of Canada (IIROC) says that the expansion of this program will help maintain fair and orderly markets, and foster investor confidence.

On July 10, IIROC published its final guidance on the SSCB program, expanding the list of securities subject to SSCBs to include all those that are considered "actively traded". IIROC will maintain a list of all securities subject to SSCBs at www.iiroc.ca, and it will be updated monthly.

These measures are part of the series of reforms that IIROC has put into place since the "Flash Crash" that occurred on May 6, 2010.  In August of 2012, IIROC clarified its policies and procedures on erroneous and unreasonable trades, in February of the same year it updated its market-wide circuit breakers, and in March of 2013 it introduced controls at the participant level through its electronic trading rules. Most recently, in March of 2014, IIROC implemented third-party marketplace access rules.

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