The Ontario Securities Commission has issued a notice and request for comment on the Canadian Trading and Quotation System Inc.’s application for recognition as a quotation and trade reporting system.

CNQ is a private Ontario corporation formed to own and operate an electronic marketplace for Ontario investment dealers to trade non-exchange listed equity securities of Ontario reporting issuers. CNQ will be a new marketplace primarily for small issuers. Investment dealers will agree with CNQ to be bound by its rules and enforcement and discipline jurisdiction. CNQ will contract with Market Regulation Services Inc. to provide market regulation.

Issuers that are reporting issuers in Ontario can apply to CNQ to qualify their securities for quotation and trading on CNQ’s marketplace. Issuers will prepare a quotation statement and maintain an enhanced disclosure record on CNQ’s Web site and agree to follow CNQ’s policies and submit to CNQ’s enforcement and discipline jurisdiction.

The commission is publishing for comment the application of CNQ and its policies and rules, and a draft recognition order for CNQ. It proposes to adopt the Universal Market Integrity Rules, and it proposes to adopt a sales practice rule.

Staff of CNQ and the OSC have engaged in extensive discussions leading to the publication of the application and the draft recognition order. The draft recognition order establishes terms and conditions in areas such as: fees, corporate governance, discipline, and transparency.

Comments are invited by August 23.