Do all the SROs do the same thing?

Not exactly. IIROC monitors the bond and money markets while each of the stock exchanges looks after its own market, be it for stocks, options, futures or all three! They do similar work, especially in the area of member regulation. In this area, there is some overlap of responsibilities as an investment dealer is often a member of both IIROC and the stock exchanges. All the SROs employ investigators and compliance officers to ensure the dealer community is meeting standards.

The market regulation area is more likely to be different at each SRO, reflecting the different kinds of markets each oversees. Stock markets are listed markets, often with direct public participation. Stock exchanges spend a great deal of time qualifying companies before they can be listed and in monitoring stock performance. Price performance in equities is very closely linked to the day-to-day life and performance of the company that issued the stock. To make sure these markets are fair, stock exchanges set rules to ensure material company information gets out to shareholders so that everyone trades on an equal footing. They can stop trading in the market to make sure that happens. Stock exchanges have many other rules to make the market more open and fair.

The bond market, however, is an unlisted market, generally for professionals. That does not mean that the market is regulated less strictly. Companies that are active in the bond markets must provide regular disclosure in addition to the extensive disclosure required before a new issue. The focus, however, is on ensuring visibility, fair access, and honest prices among dealers so that the investing public who are buying and selling in the bond and money markets can benefit.

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