The Investment Industry Regulatory Organization of Canada (IIROC) is contemplating several changes to the debt transaction reporting requirements in an effort to enhance their ability to sniff out suspicious trading and possibly uncover advisor misconduct.
Specifically, IIROC is proposing to reduce the transaction reporting deadlines, increase the amount of data that are collected, and curb duplicative reporting by eliminating the reporting requirement for alternative trading systems for trades that are executed against a dealer.
Furthermore, IIROC is proposing to add six new data fields to the information that must be reported to regulators, according to the notice spelling out the proposals. The move is designed to enhance IIROC’s surveillance capabilities and to help the Bank of Canada fulfil its regulatory duties.
The additional data fields would enhance IIROC’s ability to uncover suspicious trading, observe “patterns of behaviour associated with specific advisors” and reduce the number of false positive alerts that are being generated.
The move to reduce transaction reporting deadlines is intended align with the shorter settlement cycle (to T+2 from T+3) that was adopted last autumn.
“The proposed shorter reporting deadlines would allow IIROC to facilitate overnight data reconciliation which would, in turn, help IIROC debt surveillance deal with alerts and issues before settlement,” IIROC states.
The proposals are out for comment until June 6.