IIROC published guidance yesterday that will expand its implementation of single-stock circuit breakers.

As we discussed in February 2012, under IIROC's current guidance on single-stock circuit breakers, securities that are part of the S&P/TSX Composite Index, as well as ETFs comprised principally of listed securities, will be halted for trading where there has been a price increase or decline of at least 10% in a five minute period. The circuit breaker initially halts the particular security for five minutes, and this time may be extended for a further five minute period if a significant imbalance of buy and sell orders remain. The circuit breaker only applies between 9:50 a.m. and 3:30 p.m.

Under the new guidance, single-stock circuit breakers will also now apply to securities that are considered "actively-traded". Actively traded securities are those that are traded at least 500 times per trading day and have an average trading value of at least $1.2 million per trading day, in total across marketplaces, during the preceding three calendar months.

The trigger is also being modified so as to require price volatility of at least 10% and 20 trading increments in a five minute period to avoid inappropriately triggering a circuit breaker for lower-valued securities. Meanwhile, the post-open period (9:30 a.m. to 9:50 a.m.), which IIROC characterizes as a time of natural volatility, and the 30 minute period following the resumption of trading after a regulatory halt, will now be covered by a trigger that applies in the event of a price increase or decline of at least 20% and 40 trading increments in a five-minute period.

The new guidance will come into effect on February 2, 2015. For more information, see IIROC Notice 14-0170.