Alert:
A nationwide postal strike or lockout began on November 15, 2024. Dealer Members must take steps to ensure that document delivery requirements prescribed under CIRO Rules continue to be met.
Trade Surveillance
Under recognition orders issued by the Canadian Securities Administrators (CSA) and through agreements with the marketplaces, CIRO oversees all equity market activity across Canadian marketplaces, including stock exchanges and alternative trading systems. This oversight aims to detect manipulative trading practices and other violations of the marketplace trading rules.
CIRO also monitors all debt market trading conducted by our Dealer Members and Schedule I, II and III Banks through various fixed income alternative trading systems (ATS), Inter Dealer Bond Brokers (IDBBs) or over the counter (OTC).
By accessing data from the TMX Montreal Exchange listed derivatives data and integrating it with equity and debt market data, CIRO is also able to identify potential manipulative trading activities across different asset classes and products as part of our cross-asset surveillance.
Recently, CIRO has expanded to oversee the surveillance of trading on CIRO registered crypto marketplaces. CIRO has also increased its visibility into Canadian Dealer over the counter (OTC) crypto platforms to ensure adequate oversight of CIRO regulated entities as the sector continues to evolve.
Our goal is to detect manipulative or unfair trading practices and other breaches of CIRO Rules in order to ensure market integrity and to protect investors.
Surveillance of Cross-Asset Trading
Given the correlation across asset classes, CIRO monitors trading in different assets, where trading in one asset could be used to manipulate the prices in another asset class. An example would be trading in the underlying to manipulate the pricing in an option, future, or benchmark.
Surveillance of Crypto Currency Trading
With the rapid growth of the crypto markets globally, CIRO has been tasked with providing oversight and surveillance of this activity in Canada. The goal of CIRO’s Crypto Market Surveillance team is to detect manipulative or unfair trading practices and other breaches of trading rules to ensure market integrity and to protect investors.
Surveillance of Debt and Repo Trading
CIRO uses debt and repo transaction data submitted by Reporting Entities to carry out its responsibilities with respect to the surveillance and oversight of OTC debt and repo markets, through the application of alerts and reports designed to detect potential abusive trading practices. Our Debt Surveillance team utilizes a state-of-the-art technology platform, SMARTS, to surveil debt and repo market activity.
CIRO also publishes Bond and Money Market Secondary Trading Statistics for informational purposes, as well as Corporate and Government Bond Information to aid in market transparency.
Surveillance of Equity Trading
CIRO monitors equity trading on Canadian marketplaces in real time using a state-of-the-art technology platform, SMARTS.
The goal of CIRO’s Equity Market Surveillance team is to detect manipulative or unfair trading practices and other breaches of the marketplace trading rules to ensure market integrity and to protect investors.
In addition to real-time surveillance, we also monitor for timely disclosure of material information by companies that could affect their stock price on the Canadian marketplaces that have retained CIRO as their regulation services provider.
Trade Review and Analysis
CIRO detects potential violations of trading rules through our surveillance practices, as well as from our compliance reviews of firms’ trading activities, or other sources such as public complaints or referrals from other regulators.
Suspected violations of trading rules are escalated to CIRO’s Trading Review & Analysis team for additional analysis. Our Trade Review & Analysis team has two main functions:
- Conduct preliminary investigations if there is reason to believe that improper trading is occurring or has occurred.
- Conduct post-trade reviews of data to monitor for trading that violates trading rules, including market manipulation.
When our Trading Review & Analysis team finds evidence of a rule violation, they refer the case to CIRO’s Enforcement team or other regulatory agencies, primarily the provincial/territorial securities regulators, for further investigation and possible disciplinary action.
Where we find evidence of potential insider trading, we refer the matter to the provincial/territorial securities regulators.
For information on how we oversee trading practices at our Dealer Members, see Dealer Member Compliance.