The Investment Industry Regulatory Organization of Canada (IIROC) yesterday published its circuit breakers for the fourth quarter of 2012, which are set in coordination with those in U.S. markets. In the U.S., trading halts occur based on trigger levels of 10%, 20% and 30% drops of the Dow Jones Industrial Average, calculated at the beginning of each quarter using the previous month's average closing value. The NYSE thresholds for Q4 2012 are 1,350 points, 2,700 points and 4,050 points respectively.
It is IIROC's policy that it will coordinate trading halts with U.S. markets, but for days when Canadian markets are open and American markets are closed, IIROC has published related triggers based on drops in the S&P/TSX Composite Index. The TSX trigger levels are: Level 1 (10%) - 1,250 points; Level 2 (20%) - 2,450 points and Level 3 (30%) - 3,700 points, and result in trading halts ranging from 30 minutes to the balance of the trading session, depending on the time of day and magnitude of the market decline. For more information, see IIROC Notice 12-0285.
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