On August 20, Investment Industry Regulatory Organization of Canada (IIROC) released guidance regarding the circumstances in which it may intervene to vary or cancel trades it considers "unreasonable" or not in compliance with UMIR. As we discussed in an earlier post, IIROC released proposed guidance on the subject in April, and the final version of the guidance reflects changes suggested in response to comments received in response to the original proposal.

Ultimately, guidelines are provided with regards to (i) a "no touch zone" for which there will generally be no regulatory intervention when the price difference between the erroneous trade and the current fair value of the security does not exceed the greater of 10% of the security's price or 10 trading increments; (ii) the limited conditions under which IIROC would consider intervening to cancel an erroneous trade; and (iii) the market-based conditions used to determine whether a higher threshold than the "no touch zone" will be used when an erroneous trade has been executed during significant market volatility, outside normal trading hours or in a security of limited or very limited liquidity. For more information, see IIROC Notice 12-0259.