Instinet Canada Limited Written Standards for Granting Direct Electronic Access or Entering into a Routing Agreement
Before granting a client direct electronic access ("DEA") to a marketplace or entering into a routing agreement with another investment dealer or foreign broker dealer, Instinet Canada Limited ("ICL") is required to ensure that the client meets certain standards of financial strength, trading knowledge and regulatory awareness as described below.
The Chief Compliance Officer or designate of ICL must ensure that each DEA or routing client satisfies the following before access is granted:
- has sufficient resources to meet any financial obligations that may result from use of direct electronic access or the routing arrangement;
- has reasonable arrangements in place to ensure that all personnel transmitting orders using direct electronic access or the routing arrangement have reasonable knowledge of and proficiency in the use of the order entry system;
- has reasonable knowledge of and the ability to comply with all applicable Regulatory Requirements, including the marking of each order with the designations and identifiers required by Rule 6.2;
- has reasonable arrangements in place to monitor the entry of orders transmitted using direct electronic access or the routing arrangement;
- takes all reasonable steps to ensure that the use of automated order systems, by itself or any client, does not interfere with fair and orderly markets; and
- ensures that each automated order system, used by itself or any client, is tested in accordance with prudent business practices, including initially before use or introduction of a significant modification and at least annually thereafter.