In September 2015, the CSA announced a plan to enhance fixed income regulation in Canada with the aim of improving market integrity, facilitating more informed decision making among all market participants, and evaluating whether access to the fixed income market is fair and equitable for all investors. The CSA and the Investment Industry Regulatory Organization of Canada (IIROC) are planning to review fixed income trading activity, as well as the appropriateness of the initial dissemination delay (T+2), and the volume caps to determine whether they continue to be appropriate. CSA staff also plan to review dealers’ practices regarding new issue allocations, in order to determine if regulatory intervention is necessary in light of concerns from industry participants about their ability to participate in debt offerings. CSA staff have identified the following benefits of moving forward with implementation of the proposed fixed income regulation:
- Facilitating the public availability of web-accessible data, free of charge, that is meaningful and relevant for the different types of investors and market participants and enables them to make more informed decisions.
- Increasing transparency in a way that does not negatively impact market liquidity.
The CSA found no clear consensus from the commenters on various aspects of the proposal to increase corporate debt transparency. However, CSA staff remains of the view that the transparency proposal constitutes a balanced approach to increase transparency while mitigating any potential related negative impacts. Provided the necessary approvals are obtained, IIROC will disseminate post-trade information for corporate debt trades as follows:
- Before the end of 2016, post-trade information for all trades in Designated Debt Securities and for retail trades in all other corporate debt securities reporting to IIROC, on a T+2 basis and subject to the existing volume caps described above.
- In 2017, post-trade information for all trades in all corporate debt securities reporting to IIROC, on a T+2 basis, subject to volume gaps.
The CSA and IIROC will review fixed income trading activity as well as the appropriateness of any dissemination delay, and volume caps over time, with a view to decreasing dissemination delay from T+2 where appropriate (all subject to public consultation).