The Investment Industry Regulatory Organization of Canada (IIROC) has published a proposed fee model for the information processor for corporate debt securities on Thursday that aims to recover the self-regulatory organization’s costs of operating the information processor.
IIROC launched a new corporate bond information website that provides free online debt trading information to the public in July and Thursday’s announcement proposes to adopt a new fee model to finance that service: “We are proposing a simple fee model based on each contributing dealer’s proportion of publicly reported corporate debt transactions.”
In addition, IIROC is considering an expansion of the service that would allow it to distribute data for bulk download for a fee. Currently, the data are available for look-up only, and is not accessible in bulk.
Through consultations with dealers, investors and other market participants, IIROC reports that it has “learned that downloadable bulk corporate debt transaction data would be useful” for a variety of reasons, including monitoring fair pricing compliance, commission payment practices; risk management; forecasting; credit index creation and management; and ETF structuring and valuation.
Allowing the data to be easily retrieved and used for these purposes, “will achieve the [Canadian Securities Administrators’] objectives of: facilitating more informed decision-making among all market participants, and improving market integrity,” IIROC’s release says.
IIROC’s notice estimates the costs that the service could face in fiscal 2018, depending on whether or not the expanded service is introduced. The estimated annual operating expenses for the current free service in fiscal 2018 will be approximately $350,000; that would rise to approximately $675,000 if the expanded service is introduced.
The proposed model is out for comment until Jan. 1, 2017.
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