Investor Alert:
CIRO is issuing a warning to Canadian investors regarding Canada Token Trade.
Effective Date: December 31, 2021
For the purposes of marketplace and average price trade disclosure on trade confirmations for listed and quoted securities,1 Dealer Members (Dealers) may use the following language:
This acceptable marketplace and average price disclosure language may be combined on trade confirmations and may be placed on the back side of the trade confirmation.2
This Guidance Note clarifies acceptable average price disclosure language for use on trade confirmations. Dealers are permitted to adopt general marketplace and average price disclosure on all trade confirmations whether a trade is effected on one or more marketplaces or markets and whether a trade price is an average price of multiple trades or the price of a single trade.
Clients will continue to be able to obtain further details of the execution of any order at no cost from Dealers, and trade confirmations will continue to contain requisite information such as price and any commission charged.
To reduce costs in the multiple marketplace environment, some Dealers have adopted trade processing functionality that aggregates transaction information onto one trade confirmation, but face at that point in the process operational limitations in identifying which transactions were aggregated for the purpose of average price disclosure. Thus Dealers have requested the ability to use general average price disclosure language on all trade confirmations so that they are not required to produce separate price disclosure language when a transaction reflects only one trade execution.
In order to alleviate these operational issues and to align with the general marketplace disclosure IIROC has accepted, IIROC will permit use of the following average price disclosure language on transaction confirmations: “May be an average price, details available upon request.” This acceptable marketplace and average price disclosure language may be combined on trade confirmations and may be placed on the back side of the trade confirmation. The phrase “details available on request” may be abbreviated to “details on req.”. The word “average” may be abbreviated to “avg”.
Dealers continue to be subject to the provisions of section 3816 which requires that each trade confirmation must include, among other things: the quantity and description of the security; the consideration; and any commission charged in respect of the trade. Specifically, in order to continue to comply with the provisions of section 3816, all trade confirmation disclosures required under the rule, other than the revised marketplace and average price disclosures discussed in this Guidance Note, must continue to be placed on the front side of the trade confirmation.
This acceptable average price disclosure language and acceptable marketplace disclosure language on trade confirmations may be used in circumstances when an order is executed on:
If an order has been executed in whole or in part on a foreign organized regulated market, IIROC recommends that the disclosure include the quantity of securities traded on the foreign organized regulated market together with the applicable foreign exchange rate for any currency conversion.
Dealers that are able to correctly identify specific marketplaces or markets of execution for disclosure on trade confirmations may continue to do so. Dealers that are able to correctly identify average price transactions for the purpose of average price disclosure on trade confirmations may continue to provide disclosure on the trade confirmation that a trade is at an average price with notice that details are available upon request.
Dealers must respect audit trail requirements3 and accordingly maintain appropriate records, including for the purpose of providing details of the execution of any order to the regulator or client upon request.4
Clients may inquire as to the identity of the marketplaces or markets of execution and whether a trade price is an average price and request further particulars. In all cases, Dealers are to continue identifying and providing particulars of marketplaces or markets of execution and of average price trades in a timely manner at no cost to clients making request for such details.
This Guidance Note relates to the following UMIR and IIROC Rules:
This Guidance replaces the guidance set out in:
This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.