Canadian securities regulators seek comment on the internalization of trade orders


Toronto –The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) today published for comment the Joint CSA/IIROC Consultation Paper 23-406 Internalization within the Canadian Equity Market. The consultation paper seeks feedback in response to concerns regarding the internalization of orders within the Canadian equity market.

Internalization is generally considered to relate to situations where a trade is executed with the same dealer as both the buyer and the seller.

“We are seeking feedback to consider how current trading practices fit within our rule framework, offer investors protection, and support the evolution and functioning of a fair and efficient market,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.

This consultation paper provides relevant data in relation to the magnitude of internalization in Canada, while identifying specific concerns and seeking feedback with respect to these issues.

Some of the areas of focus identified in the consultation paper include the common versus individual good, the retail investor and segmentation of retail orders, and the impact of broker preferencing in an evolving Canadian market. Broker preferencing is a common order matching feature of many Canadian equity marketplaces that allows an incoming order to match and trade first with other orders from the same dealer, ahead of orders from other dealers that are at the same price while also having time priority.

The comment period is open until May 13, 2019. The CSA notice can be found on CSA members’ websites.

The CSA, the council of the securities regulators of Canada's provinces and territories, co- ordinates and harmonizes regulation for the Canadian capital markets.

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For Investor inquiries, please refer to your respective securities regulator. You can contact them here This link will open in a new window.

For media inquiries, please refer to the list of provincial and territorial representatives below or contact us at [email protected]:

CSA member name

Point of contact

Phone number

Autorité des marchés financiers

Sylvain Théberge


Alberta Securities Commission

Hilary McMeekin


British Columbia Securities Commission

Brian Kladko


Financial and Consumer Affairs Authority of Saskatchewan

Shannon McMillan


Financial and Consumer Services Commission, New Brunswick

Sara Wilson


Government of Prince Edward Island, Superintendent of Securities

Steve Dowling


Manitoba Securities Commission

Jason (Jay) Booth


Nova Scotia Securities Commission

David Harrison


Nunavut Securities Office

Jeff Mason


Office of the Superintendent of Securities, Newfoundland and Labrador

Renée Dyer


Superintendent of Securities, Department of Justice, Government of the Northwest Territories

Tom Hall


Office of the Yukon Superintendent of Securities

Rhonda Horte


Ontario Securities Commission

Kristen Rose