What do the Universal Market Integrity Rules (UMIR) aim to ensure?

What do the Universal Market Integrity Rules (UMIR) aim to ensure?

• A. Protection of financially weak institutions
• B. Fairness and investor confidence in trading
• C. Increased fees for trading activities
• D. Monopoly for a single exchange

Answer: (B)

The Universal Market Integrity Rules (UMIR) are designed to promote fairness and enhance investor confidence in the trading environment. These rules establish a framework that applies to trading activities in Canadian markets, ensuring that all market participants have an equal opportunity to trade and that trades are executed in a transparent and orderly manner. By reinforcing a level playing field and implementing provisions that prevent manipulative and deceptive trading practices, UMIR contributes to greater trust among investors. This is essential for maintaining a robust and efficient marketplace, as investor confidence is a key driver of trading volume and market health.

The other choices do not accurately reflect the primary purpose of UMIR. For instance, while protecting financially weak institutions may seem beneficial, it is not the primary goal of these rules. Similarly, UMIR does not aim to impose increased fees for trading activities or create a monopoly for a single exchange; rather, it is focused on maintaining a competitive marketplace where fairness prevails.