Canadian securities regulators seek to update trading rules in line with US regulations

In an effort to maintain the competitiveness of Canadian securities listed on US exchanges, the Canadian Securities Administrators (CSA) have introduced proposals to align trading rules with recent updates from the US Securities and Exchange Commission (SEC). By synchronizing Canadian regulations with the SEC’s changes and timelines, the CSA aims to ensure that Canadian securities remain attractive on US platforms.
The CSA has initiated a notice and request for feedback on proposed amendments to “National Instrument 23-101 Trading Rules” and corresponding modifications to “Companion Policy 23-101 Trading Rules.” These proposed changes are meant to safeguard the competitiveness of trading in Canadian securities traded on US-registered national securities exchanges, also known as US inter-listed securities.
The proposed amendments presented by the CSA seek to harmonize the Canadian trading fee limit with the SEC’s fee cap for US inter-listed securities valued at $1 or more. The CSA is open to receiving public commentary on these proposals for a period of 60 days until March 24.
Responding to the SEC’s recent announcement of final rules aimed at reducing trading fee limits for National Market System (NMS) stocks along with lowering minimum pricing increments for select NMS stocks priced at US$11 or more, the CSA has introduced these amendments to align with the SEC’s standards.
On December 12, 2024, the Canadian Investment Regulatory Organization (CIRO) put forward proposed amendments to the Universal Market Integrity Rules (Proposed UMIR Amendments). If enacted, these changes would align Canada’s minimum pricing increments for US inter-listed securities with the SEC’s updated guidelines.
Despite the initial implementation date set by the SEC for its new rules on November 3, they were postponed due to a judicial review order issued on December 12, 2024. Consequently, the CSA has confirmed that the proposed Canadian amendments will not be effective until the SEC rules are in place. In emphasizing the need for maintaining competitiveness in Canadian markets and ensuring smooth cross-border trading for US inter-listed securities, the CSA remains committed to supporting Canadian securities’ prominent presence on US exchanges.