Universal Market Integrity Rules (UMIR)

What Are Universal Market Integrity Rules (UMIR)?

Universal Market Integrity Rules (UMIR) are a set of rules overseeing trading rehearses in Canada. These rules are set out by an independent regulator, the Investment Industry Regulatory Organization of Canada (IIROC). UMIR were laid out to advance fair, equitable, and efficient markets. Prior to the formation of the UMIR, every individual exchange was responsible for overseeing its trading rehearses. By making these practices universal, Canadian exchanges guarantee equivalent fairness and further develop investor confidence in every one of the exchanges.

Understanding Universal Market Integrity Rules (UMIR)

The IIROC decides the UMIR. The IIROC is a public self-regulatory organization that directs all investment dealers and trade on debt and equity marketplaces in Canada. The IIROC composes rules that set high regulatory and investment industry standards, for example, UMIR, screens all investment advisors employed by IIROC-managed firms, audits firms' financial compliance, and sets least capital requirements so that organizations have adequate capital for business operations. This oversight lessens the number of liquidations from unreasonable leverage and risky business rehearses.

IIROC Compliance Reviews

The IIROC conducts compliance surveys to check that organizations appropriately regulate the treatment of client accounts and that exhortation and transactions properly mirror the client's necessities and guidelines. IIROC-approved advisors must follow suitability and "know your client" rules by being know all about a client's financial situation, investment needs, objectives, investing experience, and tolerance for risk. The IIROC conducts trading conduct compliance audits to check trading firms' trade-work area procedures. The audits survey whether trade-work area procedures consent to (UMIR) and applicable provincial securities law.

IIROC Market Surveillance

The IIROC reviews the market and investigates trading to guarantee that trading conforms to UMIR and applicable provincial securities law. The IIROC is responsible for distinguishing misconduct by dealers or firms, approved people, and other market participants and bringing disciplinary procedures like fines, suspensions, and permanent boycotts or terminations for individuals and firms. The money raised from fines and settlements is added to IIROC's restricted fund and applied to capital expenditures for regulatory issues, investor and industry education projects, and different purposes authorized under IIROC's Recognition Orders.

As indicated by the Canadian Securities Exchange (CSE), traders who are individuals with a decent history with IIROC and who are likewise registered with a Canadian securities regulatory authority can apply to gain access to trade on the CSE.

The IIROC alters UMIR rules every once in a while. For instance, in 2015 the IIROC proposed amendments to the rules after a proposal by Canada Securities Administrator (CSA) to explain the interpretation of a protected order. The CSA recommended that orders that carry out a systematic order processing delay, or a "hindrance," wouldn't be viewed as protected orders.