The Canadian Securities Administrators (CSA) have proposed amendments to trading rules to align Canadian regulations with recent updates from the US Securities and Exchange Commission (SEC).
Aiming to maintain the competitiveness of Canadian securities listed on US exchanges, the CSA has tied the implementation of these changes to the SEC's timeline.
The CSA published a notice and request for comment on proposed amendments to "National Instrument 23-101 Trading Rules" and related changes to "Companion Policy 23-101 Trading Rules." The CSA designed these proposals to preserve the competitiveness of trading in Canadian securities listed on US-registered national securities exchanges (US inter-listed securities).
If adopted, the proposed amendments would align the Canadian trading fee cap with the fee cap set by the US Securities and Exchange Commission (SEC) for US inter-listed securities priced at $1 or more. The CSA will accept public feedback on the proposals for 60 days ending March 24.
The proposed amendments respond to the SEC's announcement of its final rules. These rules introduced reduced trading fee caps for National Market System (NMS) stocks and lower minimum pricing increments for certain NMS stocks priced at US$11 or more.
On December 12, 2024, the Canadian Investment Regulatory Organization (CIRO) published proposed amendments to the Universal Market Integrity Rules (Proposed UMIR Amendments). These amendments would align Canada's minimum pricing increments for US inter-listed securities with the SEC's updated rules if adopted.
Although the SEC initially scheduled its new rules to take effect on November 3, the SEC issued an order on December 12, 2024, staying their implementation pending judicial review. As a result, the CSA confirmed that Canada's proposed amendments and related changes would not take effect before the SEC rules are implemented. The CSA emphasized that its proposals aim to ensure Canadian markets remain competitive while addressing cross-border trading for US inter-listed securities.