October 17, 2008 CSA Securities

Toronto – The Canadian Securities Administrators (CSA) today published amendments to National Instrument 21-101 Marketplace Operation (NI 21-101) and National Instrument 23-101 Trading Rules (NI 23-101) that would introduce a trade-through protection rule.

Trade-through protection ensures that better-priced orders are executed first. The proposed rule would require each marketplace to establish, maintain and enforce written policies and procedures that are designed to prevent trade-throughs. Trade-through protection is currently addressed as part of the best price obligation imposed by the Investment Industry Regulatory Organization of Canada (IIROC).

“Trade-through protection is important to maintain investor confidence in the fairness and efficiency of our market,” said
Jean St-Gelais, Chair of the CSA and President & Chief Executive Officer of the Autorité des marchés financiers (Québec). “At this stage, having sought input on a trade-through protection framework and its impact on the Canadian market, we have developed a proposed rule that will ultimately benefit investors.”

Throughout the development of the proposed rule, the CSA has sought feedback from Canadian market participants, the majority of whom voiced their support for tradethrough protection. The proposed rule follows the publication of a CSA Discussion Paper 23-403 Market Structure Developments and Trade-through Obligations, as well as a public forum in 2005, and a Joint Notice with Market Regulation Services Inc. (now IIROC) on Trade-Through, Best Execution and Access to Marketplaces in April 2007.

The CSA invites interested stakeholders to provide input on the amendments and responses to the various questions raised in the CSA Notice. National Instrument 21-101 Marketplace Operation, National Instrument 23-101 Trading Rules, and related companion policies are available on various CSA members’ websites. The comment period is open until January 15, 2009.

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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