pc
nid 91986
Apr 15, 2026
ataylor@vixio.com
Ontario
Ontario Securities Commission
financial services
112% of draft length
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1777 charsOntario Securities Commission Settles Enforcement Action with Liquidnet Canada Inc. Over Marketplace Operation Breaches
On April 15, 2026, the Capital Markets Tribunal approved a settlement agreement between the Ontario Securities Commission (OSC) and Liquidnet Canada Inc. (LCI), a marketplace operator, following breaches of National Instrument 21-101 Marketplace Operation (NI 21-101).
LCI operated fixed income and equities alternative trading systems (ATSs) in violation of confidentiality requirements under Ontario securities law. Trade and order information of market participants was visible to certain employees of LCI's foreign affiliates who were not authorized under Ontario law to access such information. Additionally, when the visibility issue on LCI's fixed income ATS was identified, LCI voluntarily suspended certain trading on the ATS but failed to provide the OSC with adequate disclosure regarding the circumstances leading to the suspension.
Under the settlement agreement, LCI has paid an administrative penalty of CAD $600,000 for its failures to comply with Ontario securities law and to cover investigation costs. LCI is also required to submit to a review of its practices and procedures conducted by an independent consultant. Bonnie Lysyk, Executive Vice President, Enforcement at the OSC, stated that "marketplaces have a clear obligation to investors to operate fairly and in compliance with the rules," emphasizing that the OSC takes such breaches seriously to protect investors and maintain the integrity of Ontario's capital markets.
NI 21-101 establishes the operational rules for marketplaces, including ATSs, operating in Canada, with requirements designed to ensure fair, transparent, and orderly trading.
**Reference:**
Ontario Securities Commission. (2026, April 15). OSC reaches settlement with Liquidnet Canada Inc. Retrieved from https://www.osc.ca/
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1999 charsOntario Securities Commission Fines Liquidnet Canada Inc. CAD600,000 for Confidential Information Breaches
On April 15, 2026, the Ontario Securities Commission (OSC) issued a final order against Liquidnet Canada Inc. (LCI), a registered investment dealer, for violating subsections 5.10(1), (2), and (3) of National Instrument 21-101 (Marketplace Operation) , which govern the protection of confidential marketplace participant information. Liquidnet failed to prevent unauthorized employees of foreign affiliates from accessing confidential trade and order information of Canadian marketplace participants and was not sufficiently forthcoming with the regulator when disclosing the issue.
The OSC's key findings included:
Inadequate protections for confidential participant information: LCI allowed order and trade information from both its fixed income and equities ATSs to be visible to certain employees of its foreign affiliates. These employees were not authorized under Ontario securities law to view the information because the access was not required for Liquidnet to provide services to its participants, and the participants had not consented. The company failed to implement reasonable safeguards and oversight, and its outsourcing arrangements did not require affiliates to protect confidential data.
Lack of transparency with the regulator: After self-identifying the visibility issue, LCI voluntarily suspended trading on its fixed income system after discovering the issue and informed the OSC the shutdown was for routine "system enhancements", failing to mention the data visibility problem. It was not until a quarterly meeting months later that LCI fully disclosed the issue. The commission found the company should have been more forthright and reported the issue much earlier.
As part of the settlement agreement, LCI has paid an administrative penalty of CAD600,000 (approximately US$435,400) for failures to comply with Ontario securities law, as well as costs of the investigation. LCI will also submit to a review of its practices and procedures by an independent consultant.