Mandate and Roles

Under the AMF oversight, the Regulatory Division is intended to protect the investors and to promote the integrity of exchange-traded financial derivatives markets in Canada through the development and the consistent application of clear, fair rules and policies that are effectively adapted to market needs.

Market Analysis and Investigation

The Market Analysis unit, performs market monitoring to identify potential infringements of the Rules of the Exchange and monitor insider trading activities on the options market of the Exchange. The Market Analysis unit also reviews transactions on derivatives 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 or other Regulators.

SOLA® Surveillance is an automated surveillance system that monitors marketplace activity, based on predefined criteria and ad hoc reports, and alerts market analysts on 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.

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.

Regulatory and Disciplinary Affairs

The Regulatory and Disciplinary Affairs Unit participates in the development of new rules, their modification and the application of these rules up to the disciplinary process. In addition, this service is responsible for the following requests for approval:

  • domestic or foreign approved participant; and
  • approved person

Examinations of trading desks

The Examination unit conducts examinations of derivative instruments trading desks of approved participants 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's 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.