Mission and roles
Under the AMF oversight, the mission of the Regulatory Division is to ensure the integrity of Bourse de Montréal Inc.’s markets.
The Market Analysis unit is responsible for, among other things, monitoring insider trading activities on the options market of the Exchange. Such monitoring of trading activities is currently done on a post-trade basis. The Market Analysis unit also reviews transactions on the futures market to determine whether trading rules and principles are being complied with and fairly maintained, and whether such transactions involve abusive or manipulative trading practices.
Market analysts use sophisticated computer technology, SOLA® Surveillance, to detect unusual trading patterns. Any unusual situation or practice identified in the course of review and analysis of transactions made on the Exchange market is referred to the Investigations unit.
SOLA® Surveillance is an automated surveillance system that monitors marketplace activity, based on pre-defined criteria and ad hoc reports, and alerts market analysts to unusual trading activity and potential violations of the Exchange’s trading rules. The system has a “drill down” capability that allows market analysts to view transactional level information for research and analysis purpose.
The Market Analysis unit is also responsible for reviewing and analyzing the various reports that approved participants are required to file on a regular basis with the Division.
Investigations and disciplinary matters
The Investigation unit will open cases following complaints which may come from different sources and that have undergone a preliminary analysis by the market analysts. An investigation can also be opened following findings of regulatory violations in the course of an examination or of an analysis. When the investigation leads to the conclusion that there was effectively a violation of the Rules of the Exchange, a disciplinary process may be initiated.
The Examination unit conducts examinations of derivative instruments trading desks of approved participants that are active on the Exchange markets. The purpose of these reviews is to verify the compliance of approved participants trading practices with the Rules and Policies of the Exchange. Among other things, such examinations involve:
- verifying samples of orders entered on the Exchange electronic trading system and of transactions executed thereon;
- reviewing procedures in place and their adequacy and completeness;
- verifying various books and records.
Once the examination completed, a report is issued to the approved participant summarizing any deficiency identified in the course of the examination and setting out requirements or recommendations to correct observed deficiencies.
The Approvals unit manages the following requests for approval:
- SAM approved person;
- domestic or foreign approved participant;
- transfer or change of status requests; and
- employment termination notices.