What is the standard trading unit also referred to under UMIR?

• A. Brokerage lot
• B. Board lot
• C. Market lot
• D. Trading block

Answer: (B)

The standard trading unit referred to under the Universal Market Integrity Rules (UMIR) is a board lot. A board lot represents a standard unit of trading in the stock market, and it typically consists of a set number of shares, which can vary depending on the type of security being traded. For most common stocks on Canadian exchanges, a board lot usually consists of 100 shares. This standardization facilitates easier trading and makes it simpler for both buyers and sellers to understand the volume of shares being exchanged. The introduction and use of board lots are crucial for maintaining orderly trading and providing liquidity in the market.

In contrast, the other terms do not specifically define the standard trading unit as established under UMIR. "Brokerage lot," "market lot," and "trading block" do not have the same recognized definition related to standard trading units in the context of UMIR and may refer to different types of transactions or practices within trading environments. Therefore, understanding that a board lot is the designated standard trading unit under these rules is essential for anyone involved in trading practices.