Last week, the Investment Industry Regulatory Organization of Canada (IIROC) adopted a new rule requiring dealers to report debt securities transactions.
Under this new Dealer Member Rule 2800C, and subject to certain exceptions, debt market transactions executed by a dealer member must be reported to IIROC on a post-trade basis (on T+1), including those executed on an Alternative Trading System or through an Inter-Dealer Bond Broker. Transaction information will have to include certain specified data elements, and the Customer Legal Entity Identifier and Customer Account Identifier will remain optional fields for the time being, although the requirement will be reassessed by the Bank of Canada and IIROC within the next few years. IIROC advises that dealer members who choose to report the Customer LEI should ensure that their customer has authorized such disclosure to IIROC. Similar reporting requirements for transactions of dealer members’ affiliates who are Government Securities Distributors (GSD) are also being implemented.
The first phase of reporting responsibilities will be implemented beginning on November 1, 2015 for dealer members who are GSDs (or have affiliates who are GSDs) and are participants in the Market Trading Reporting System, with a second phase taking effect on November 1, 2016 for all other debt securities transaction reporting by GSD and non-GSD dealer members. The new rule is intended to enable IIROC to carry out its responsibilities with respect to surveillance and oversight of over-the-counter (OTC) debt market trading.
As we previously discussed, IIROC released a proposed version of the rule for comment early last year and republished the proposed rule in January 2014. The final version of the rule takes into account public comments received in response to the previous proposals and includes minor revisions intended to enhance the clarity and consistency of the earlier drafts. For more information, see IIROC Notice 14-0250.