Mandate and Roles
Under the oversight of the Self-Regulatory Oversight Committee of the Board of Bourse de Montréal Inc. (the "Bourse"), the Regulatory Division (the "Division") is mandated with exercising the self-regulatory functions of the Bourse. The Division is composed of the following four services, each with a well-defined role.
Core Regulatory Functions
The Core Regulatory Functions service ensures the performance of regulatory activities in accordance with the Division's mandate: Examinations, Market Analysis and Investigations.
Examinations
The examiners conduct trade desk reviews of the Bourse Approved Participants. The purpose of these reviews is to verify the compliance of the Approved Participants' trading practices with the Rules of the Bourse. Among other things, such examinations involve:
- verifying samples of orders entered on the trading system and of transactions executed thereon;
- reviewing procedures in place and their adequacy and completeness;
- verifying various books and records.
Once the examination is 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.
Market Analysis
The market analysts perform market surveillance to identify potential breaches of the Rules of the Bourse, monitor insider trading activities on the options market of the Bourse, and analyze any complaints received. The group also reviews transactions on derivatives to determine whether trading rules and principles are complied with and fairly maintained, and whether such transactions involve abusive or manipulative trading practices. The market analysts are also responsible for reviewing and analyzing the various reports that Approved Participants are required to file on a regular basis with the Division, as well as ensuring compliance with position limits and the evaluation of any exemption requests.
Investigations
An investigation may be opened following findings of potential regulatory breaches identified as part of an examination or analysis (including the review of a complaint). When the investigation concludes that there has been a potential violation of the Rules of the Bourse, the file may be transferred to Legal Affairs.
Legal Affairs
Legal Affairs support the Division's other services in their regulatory activities and is responsible for enforcing the Rules of the Bourse through a disciplinary process. Upon receipt of an investigation, after review and analysis, the filing of a disciplinary complaint may be recommended. The matter is heard by a Disciplinary Committee in order to rule on a contested cause or to accept a settlement agreement between the parties.
Strategy and Regulatory Outreach
The Strategy and Regulatory Outreach service ensures the coordination and prioritization of the Division's regulatory initiatives by considering their added value, cohesion with current initiatives and the needs of all stakeholders. The service coordinates and participates in the development of new rules and amendments of the Rules of the Bourse, and in the publication of guidelines, FAQs and other similar resources.
The service also acts as a resource to participants for all questions relating to rules (for example interpretation and guidance) and sharing best business practices to ensure compliance.
This service is also responsible for regulatory requests related to:
- Becoming an Approved Participant
- Becoming an Approved Person
- Approving MX-Ids
- Processing any other regulatory requests or approval applicable under the Rules of the Bourse
Data and Systems
The Data and Systems service ensures the sound management and governance of regulatory, personal and confidential data collected by the Division. This service is also responsible for determining the preferred orientations regarding technological systems and initiatives (particularly in artificial intelligence and machine learning) as well as the valorization of data.