Canadian Trading and Quotation System Inc. (CNQ) today announced the repeal of Rule 10-105. In practice, the rule created confusion, CNQ says.

The rule required a specific risk disclosure statement to be signed by clients prior to executing a solicited trade on CNQ.

In practice, the rule created confusion, CNQ says.

While the requirement was specific to CNQ, the statement described risks associated with trading any low-priced stock or stock with a small public float, irrespective of the marketplace on which it is listed.

The Ontario Securities Commission granted approval to repeal the rule following public notice and comment.

All of the comment letters received by the OSC from investors, public companies, investment and compliance professionals unanimously supported the repeal.

Following the approval, Vanessa Gardiner, senior vp and chief compliance officer for Research Capital Corp., said “There was no real benefit to the rule, because it addressed issues covered by securities laws, IDA suitability requirements and the Universal Market Integrity Rules, and created different requirements for CNQ and non-CNQ Dealers. The approval to repeal the rule illustrates the transparency and efficiency of the rule making and rule review process. The result is a more level playing field for all market participants.”

Timothy Baikie, general counsel of CNQ said “this recognizes that the existing comprehensive regulatory framework governing stock exchanges and investment dealers is sufficient to foster investor protection and efficient markets.”