CANADA: Amendment of Rules on Canada Short Selling and Failed Trades

Monday March 5 2012

On 2 March 2012, the Universal Market Integrity Rules were amended regarding Canada short selling and failed trades. The Amendments, effective September 1, 2012:

* repeal the tick test;

* impose pre-borrow requirements for short sales made in certain circumstances; and

* require a sell order from a short position to continue to be marked “short sale”;

but introduce a “short-marking exempt” designation to be used with an order for the purchase or sale of a security by certain accounts that adopt a “directionally neutral” strategy in the trading of securities. IIROC expects to issue guidance on the use of the “short sale” and “short-marking exempt” designations prior to the Amendments coming into effect.

Click on the above link for more details.