The Investment Industry Regulatory Organization of Canada
(IIROC) has released its finalized Guidance on Marketplace
Thresholds. As discussed in our 2014
post on the draft version, the Guidance is
intended to promote stable markets by controlling short-term price
volatility and catching erroneous orders before they can be
completed.
The primary effect of the Guidance, which is to take effect on
August 25, 2016, is to limit the amount by which the price to be
paid in a trade in a security may vary from (a) the price paid in
the most recent trade in that same security on that day (defined as
the "national last sale price") and (b) the national last
sale price as it stood at the most recent one-minute interval
(defined as the "one minute reference price"). The
threshold level depends largely on the price of the security and
generally ranges between 10% and 20%, with the exception of
securities trading between $1 and $5 (30%), between 50 cents and $1
(50%) and below 50
