Updated Guidance on Trading Halt Procedures for CDRs and Single-Stock ETFs

1. Background

In July 2025, CIRO published Guidance on Trading Halt Procedures for CDRs and Single-Stock ETFs. This clarified when CIRO will initiate a halt pertaining to CDRs, and SSETFs linked to a foreign-based underlying security. This Guidance Note re-iterates and expands upon that guidance.

Our approach to halting trading in CDRs and SSETFs differs, as set out below, depending on whether the underlying security is listed on:

1. a Canadian equity exchange, or
2. a U.S. exchange, or has a sponsored ADR, or
3. another foreign marketplace that is not in the U.S.

A CDR is a transferrable depositary receipt relating to a single class of equity security of an issuer incorporated or formed outside of Canada. These products are designed to provide Canadian investors with direct access to ownership of the shares underlying the CDR through Canadian dollar denominated trading on Canadian markets.

A single-stock Exempt Exchange-traded Fund1is an ETF that invests in a single specified public issuer that may be listed on a:

• Canadian equity exchange,
• trading venue in a foreign jurisdiction, or
• a Canadian equity exchange as well as on a trading venue in a foreign jurisdiction (dually listed).

1.1 Current approach to addressing volatility

CIRO has established a multi-tiered approach to controlling short term, unexplained price volatility. One element of this approach includes Single-stock Circuit Breakers (SSCBs) which are designed to address rapid, significant and unexplained price movement in a particular security. Since the introduction of SSCBs in 2012, all ETFs (including single-stock ETFs) have been subject to this price volatility control mechanism. Generally, the SSCB regime:

• applies from 9:30 a.m. to 3:30 p.m.;
• provides for an initial halt of 5 minutes that may be extended for an additional 5 minutes; and
• provides for the cancellation of any trade that executes at more than 5% beyond the SSCB trigger level.

The SSCB regime was extended to apply to all CDRs in January 2023, when CIRO published Additional Guidance Respecting Application of Single-Stock Circuit Breakers.

1.2 Expansion of CDR and SSETF Listings

Canadian listings of CDRs and SSETFs continue to grow – with the underlying securities spanning domestic and international jurisdictions. In some instances, the underlying security may be included in more than one CDR or SSETF. This growing presence of CDRs and SSETFs across jurisdictions both within and outside of Canada introduces new complexities for CIRO in establishing an effective halting framework. The following sections outline key regulatory considerations arising from this expansion.

1.2.1 Increase of CDRs and SSETFs with foreign-issued underlying securities

With the increase in both the number of listings tied to a foreign issuer, and the expansion of listings into European and other overseas jurisdictions, there is increased risk that the foreign issuer that underlies the CDR or SSETF may disseminate material information during or outside of Canadian trading hours.

CIRO has heard concerns from both listing exchanges and issuers of CDRs and SSETFs that they are not able to monitor for halts in the underlying foreign security. In particular, listing exchanges in Canada have noted that they have no relationship with the underlying foreign issuer of a CDR or SSETF, and therefore do not have similar insights into the foreign issuer as compared to traditional exchange listings. Additionally, listing exchanges in Canada can only implement “business halts”2 which serve only to halt trading on the listing exchange, and not other marketplaces that may also trade the CDR or SSETF. CIRO also does not have a relationship with the underlying issuer if they are domiciled in a foreign jurisdiction. CIRO Surveillance staff do not monitor the timely disclosure of material information by the issuer of the underlying foreign security of a CDR or SSETF, nor do staff review news releases that contain material information as it relates to the underlying foreign issuer. However, we have leveraged our existing surveillance processes and the expertise of CIRO Surveillance staff, including the ability to implement regulatory halts that halt trading across all Canadian marketplaces.

An approach to halting trading in certain CDR or SSETF that leverages CIRO’s strengths provides better outcomes for investors, rather than relying on the listing exchange or the issuer of the CDR or SSETF.

1.2.2 Emergence of SSETFs with Canadian-issued underlying securities

CIRO is observing the emergence of SSETFs that reference Canadian-listed issuers as their underlying securities. In such cases, the underlying issuer is subject to CIRO’s oversight and regulatory framework.

Given the domestic nature of the underlying security in these instances, CIRO actively monitors trading activity in the underlying security, as well as the issuer’s dissemination of material news and compliance with timely disclosure obligations. Furthermore, CIRO retains the authority to impose a regulatory halt on the underlying security when appropriate, in accordance with UMIR Rule 9.1, to ensure fair and orderly markets.

2. Trading halt procedures for CDRs and SSETFs

Given the expansion of listings of CDRs and SSETFs, CIRO is refining its oversight framework to ensure that trading activity involving CDRs and SSETFs remains consistent with its mandate to promote fair and efficient capital markets. Market participants should keep in mind that Single-Stock Circuit Breakers are the first mechanism in place to address rapid, significant, and unexplained price movements across all securities, including CDRs and SSETFs. For trading halts involving CDRs and SSETFs, specific procedures apply depending on the location of the listing of the specified issuer underlying the CDR or SSETF. These procedures are highlighted in the table below, and further detailed in the subsequent sections.

2.1 Underlying issuer of the CDR or SSETF is a listed issuer in the U.S. or underlying issuer has an ADR

For underlying issuers that are listed on a U.S. exchange, or that have a U.S.-listed ADR (i.e., a sponsored ADR), CIRO will monitor for halt messages from the U.S. listing exchange that relate to disclosure of material information. When a U.S. halt is identified that relates to material information disclosure, CIRO Surveillance will impose a manual halt in Canada. We will also endeavor to manually resume trading in a manually halted security in alignment with a resumption in trading in the U.S. Note that foreign market resumptions may occur more quickly than the typical 30-minute timeframe observed in Canada.

As mentioned above, CIRO Surveillance staff do not monitor the timely disclosure of material information by the underlying issuer of a CDR or SSETF that is listed in any foreign jurisdiction including the U.S., nor do staff review news releases that contain material information as it relates to the underlying issuer.

CIRO Surveillance will generally not impose a manual halt in Canada for other U.S. halt reasons such as the triggering of U.S. mechanisms designed to address short term market volatility in a manner similar to SSCBs. These U.S. controls are typically referred to as “Limit Up–Limit Down”.

This process will not be automated and will be subject to a delay. Subject to regulatory interventions described below under subsections 2.5 and 2.6 of this Bulletin, in the normal course CIRO will not cancel or vary trades that occur during the time between the U.S. halt and the manual halt in Canada.

2.2 Underlying issuer of the CDR or SSETF is a foreign- listed issuer

There is generally no readily accessible method to monitor trading halts of CDRs and SSETFs linked to a foreign-issued underlying security that is not a U.S. listing. In addition, the trading hours of the listing exchange of the underlying issuer of such CDRs and SSETFs will often not align with Canadian trading hours. As a result, CIRO Surveillance does not generally expect to be able to perform this function as described above. Therefore, for these CDRs and SSETFs, CIRO will generally not impose manual halts and will continue to rely on our SSCB regime as discussed in subsection 1.1 of this bulletin to address volatility. In the unlikely event that surveillance becomes aware of a foreign halt, there remains a remote possibility that the CDR or SSETF may also be halted.

2.3 Underlying Issuer of the SSETF is a Canadian listed issuer

In circumstances where CIRO Surveillance staff halts trading in the underlying security due to the presence of material information or other regulatory considerations, a corresponding halt in the trading of the related SSETF will also be imposed across all Canadian marketplaces. As described earlier in subsection 1.1 of this Bulletin, the existing SSCB regime will not change and will continue to apply.

2.4 Existing SSCB regime will not change and will continue to apply

CIRO will continue to leverage our SSCB regime with no changes to existing processes or guidance. As a result, for all CDRs and SSETFs, our existing SSCB regime as described above in subsection 1.1 of this Bulletin will continue to provide protection against rapid price movements.

2.5 Guidance on regulatory intervention for the variation and cancellation of trades will not change and will continue to apply

Under the authority of UMIR Rule 10.9, CIRO may undertake discretionary regulatory intervention in order to vary or cancel any trade that is, in the opinion of the Market Integrity Official:

• “unreasonable” as undertaken when material information related to the issuer of the security may be known to certain parties trading in the market but the information has not been publicly disseminated in accordance with applicable timely disclosure standards (“asymmetric dissemination of material information”);
• “unreasonable” in connection with an unintentional “erroneous” trade; or
• not in compliance with the provisions of UMIR.

Our Guidance on Regulatory Intervention for the Variation or Cancellation of Trades sets out the circumstances in which CIRO may exercise this authority. This guidance does not change with the publication of this guidance note and continues to apply with respect to trading in CDRs and SSETFs.

The process of halting certain CDRs and foreign-underlying SSETFs is not automated and requires manual intervention by CIRO Surveillance staff. CIRO will generally not cancel or vary trades that occur during the time between the halt in the foreign markets and the halt in Canada. However, the existing SSCB regime will continue to apply with respect to CDRs and foreign-underlying SSETFs and will continue to address short term volatility. In addition, CIRO may undertake discretionary regulatory intervention under our existing authority where warranted and as described in our existing guidance.

2.6 Trading halts where the issuer of the CDRs and SSETFs on a Canadian listing exchange has material information

If CIRO’s Surveillance team believes that the issuer of a Canadian-listed CDR or SSETF has information that could materially affect the price of the CDR or SSETF, they may halt trading in that security on all Canadian marketplaces. Surveillance’s process to monitor for timely disclosure would apply, regardless of the location of the listing of the underlying security.

3. Implementation

This Guidance note is effective immediately.

4. Applicable Rules

UMIR Rules this Guidance Note relates to:

UMIR 10.9

5. Previous Guidance Note

This Guidance Note replaces:

• Guidance Note GN-URPart10-25-0001 - Guidance on Trading Halt Procedures for CDRs and Single-Stock ETFs (July 4, 2025).

6. Related Documents

This Guidance Note is related to the following documents:

• Guidance Note 12-0258 – Guidance on Regulatory Intervention for the Variation or Cancellation of Trades (August 20, 2012).
• Guidance Note 23-0006 – Additional Guidance Respecting Application of Single-Stock Circuit Breakers (January 19, 2023).

• 1

  An “Exempt Exchange-traded Fund is defined in Rule 1.1 to mean “…a mutual fund for the purposes of applicable securities legislation, the units of which:

  • are a listed security or quoted security; and
  • are in continuous distribution in accordance with applicable securities legislation but does not include a mutual fund that has been designated by the Market Regulator to be excluded from this definition.
• 2

  A “business halt”, also known as an exchange halt, is implemented by a Canadian listing exchange. Reasons for a business halt include a company undergoing a corporate transaction or an interruption in trading caused by system issues.