RE:RE:Complain Re Instinet Canada IN THE MATTER OF: The Rules of the Investment Industry Regulatory Organization of Canada and Instinet Canada Ltd. 2020 IIROC 18 Investment Industry Regulatory Organization of Canada Hearing Panel (Ontario District) Heard: June 3, 2020 in Toronto, ON Decision: June 3, 2020 Written Reasons: June 23, 2020 Hearing Panel: The Hon. Karen Weiler, M.C. (Chair), Christopher Hill and Neil Murphy Appearance: Andrew Werbowski, Senior Enforcement Counsel Ren Sorell for Instinet Canada Ltd. Torstein Braaten, Respondent’s Chief Operating and Chief Compliance Officer REASONS FOR DECISION I. OVERVIEW ¶ 1 This Panel was convened to consider whether the Settlement Agreement entered into between the Staff of the Investment Industry Organization of Canada (“IIROC”) and Instinet Canada Ltd. (“Instinet”), a Dealer Member of IIROC and the Respondent in these proceedings, should be accepted. ¶ 2 For the purposes of the Settlement Agreement, the Respondent admitted that it failed to comply with UMIR Rule 7.1 and UMIR Policy 7.1 respecting its supervision obligations to prevent and detect manipulative and deceptive trading practices by a direct electronic access client. Manipulative and deceptive practices, here, quote manipulation, secure an illegal price advantage to the client to the detriment of other market participants and distort the genuine price formation process of the marketplace. They are prohibited under UMIR Rule 2.2 and Policy 2.2. The Respondent’s omission was not deliberate; it did not have in place an adequate system of supervisory controls to prevent such practices between January 2016 and February 2018. ¶ 3 By way of penalty, the Respondent agreed to pay a fine of $155,000 and costs of $15,000 within 30 days unless otherwise agreed. In addition, the Respondent agreed to provide a report to IIROC Staff outlining the remedial measures it has taken within six months of approval of the Settlement Agreement. ¶ 4 We recognize that we must accept or reject the Settlement Agreement: Rule 8215(5) of the Consolidated Rules. After considering the Agreed Facts in Part III of the Settlement Agreement we accepted