The Canadian Capital Markets

The structure of Canadian securities markets — TSX, TSXV, Cboe, Nasdaq Canada, ATSs — and how order handling, best execution, and the Order Protection Rule work in a fragmented marketplace. T+1 settlement is fully phased in.

Rules tested:UMIRNI 23-101CIRO Rule 3800NI 31-103

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Marketplace structure

Lit markets: TSX, TSXV, Cboe Canada, Nasdaq Canada.
Alternative trading systems (ATSs) and dark pools handle institutional and large orders.
Inter-listed securities trade simultaneously across multiple marketplaces.
Marketplace fragmentation = best execution responsibility on the dealer.

Best execution and Order Protection Rule

Best execution = most advantageous terms reasonably available under the circumstances.
Factors: price, speed, certainty of execution, total transaction cost.
OPR (NI 23-101 Part 6): trade-through prohibited — execution must occur at the best displayed price.
Smart Order Routing (SOR) systems navigate marketplace fragmentation automatically.

Order types and handling

Market order: execution at best available price, no price guarantee.
Limit order: price guarantee, no execution guarantee.
Day order: expires at end of trading day.
GTC: expires after 90 calendar days on TSX unless cancelled.
Stop loss / stop buy: triggers a market order on a price level.
Special handling: PRO orders subject to lower priority than client orders at the same price.

Clearing, settlement, and CDS

CDS Clearing and Depository Services Inc. handles Canadian equity clearing.
T+1 settlement standard for equities, bonds, and most securities post-2024.
Government of Canada T-bills settle SAME DAY.
Failed trades incur buy-in or sell-out remediation.
Continuous Net Settlement (CNS) nets buys and sells daily for member dealers.

Listing requirements

TSX vs TSXV: TSX = larger, more liquid; TSXV = junior/growth.
Minimum market value, public float, and operating history thresholds vary by tier.
Capital Pool Companies (CPC) on TSXV raise $200K to $9.5M; qualifying transaction deadline = 24 months.
Continuous listing requirements: ongoing disclosure, minimum bid maintenance.

Short selling rules

Short sales MUST be declared at the time of the trade.
Borrowed shares = security loan agreement, with dividends rebated to lender.
Tick rule no longer applies federally — short sales can execute at any price.
Mandatory buy-in if short position fails to deliver.

Exam traps

Trap:Forgetting that T-bills still settle SAME DAY post-T+1 transition.Fix:Government of Canada T-bills are same-day. T+1 applies to everything else.
Trap:Treating market orders as guaranteed execution at the displayed price.Fix:Market orders guarantee execution, not price. Limit orders are the reverse.
Trap:Missing the OPR trade-through prohibition.Fix:Execution must occur at the best displayed price across all visible marketplaces.

Memory hooks — Element 4

Ciroexam · CIRE 2026

→T+1 = most securities · Same-day = T-bills
→OPR = trade-through prohibited
→GTC TSX = 90 calendar days
→Day order = end of trading day
→Short sales MUST be declared
→CPC IPO range = $200K to $9.5M
→CPC qualifying transaction = 24 months