How We Are Regulated
The Aequitas NEO Exchange Inc. and its parent company, Aequitas Innovations Inc., have been authorized by the Canadian Securities Administrators (“CSA”) to operate an exchange for listing and trading securities and certain structured products. To be authorized, exchanges are “recognized” or exempted under securities legislation in the jurisdictions in which they operate.
Recognition and Exemption Orders
The Aequitas NEO Exchange is authorized to operate across Canada as an exchange for listing and trading equity and debt securities and certain structured products. In November, 2014, Aequitas NEO Exchange Inc. and its parent company, Aequitas Innovations Inc., received a recognition order from the Ontario Securities Commission (“OSC”). In December, 2014, the other members of the Canadian Securities Administrators (“CSA”) issued exemption orders. All of the orders, which can be found below, were effective as of March 1, 2015.
- Aequitas Innovations Inc. and Aequitas NEO Exchange Inc. OSC Recognition Order
- Aequitas Innovations Inc. and Aequitas NEO Exchange Inc. OSC Variation Order
- Aequitas Innovations Inc. and Aequitas NEO Exchange Inc. Multi-Jurisdictional Exemption Order
- Aequitas Innovations Inc. and Aequitas NEO Exchange Inc. ASC Exemption Order
- Aequitas Innovations Inc. and Aequitas NEO Exchange Inc. BCSC Exemption Order
The recognition order followed the Aequitas NEO Exchange application filed in June 2014 and a public comment period. A summary of comments can be found here.
The exemption orders from the rest of the CSA were issued in December, 2014, effective March 1, 2015, the first being an order for multi-jurisdictional relief from the securities regulatory authorities in Québec, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan and Yukon, the second and third from the Alberta Securities Commission and the British Columbia Securities Commission.
To operate nationally, an exchange must be recognized by at least one CSA jurisdiction (the “lead regulator”), in our case the OSC. The lead regulator directly oversees the exchange, and exempting regulators rely on the lead regulator’s oversight. This model is set out in the CSA’s Memorandum of Understanding Respecting the Oversight of Exchanges and Quotation and Trade Reporting Systems. The OSC’s oversight includes review and approval of our rule and policy changes, significant structural and operational changes, and fees. It also receives other filings and reporting as required under the recognition order.
As a recognized exchange, we can carry out our market regulation activities directly or through a regulation services provider. Similarly to the other equity exchanges in Canada, we have contracted with the Investment Industry Regulatory Organization of Canada (“IIROC”) to act as our regulation services provider.