CANADA: Short Position Calculation and Reporting

Wednesday March 28 2018

The Investment Industry Regulatory Organisations of Canada has published a Short Position Calculation and Reporting Notice. Participants and Access Persons must file short position reports as required under UMIR 10.10. Guidance Notice 17-0241 Guidance on Short Position Calculation and Reporting sets out the process to calculate and file short position reports. The technical notice sets out:

• November 30, 2018 as the effective date of the Guidance
• the process to file a short position report with IIROC
• expectations regarding the filing of a short position report.

Reporting Schedule

Participants and Access Persons (each a Reporting Party) are required to calculate and file a report of the short positions in each listed and quoted security as of the 15th day and the last day of each month (calculation date) in a form as determined by IIROC (short position report). An Access Person is not required to file a report if the short position is in an account maintained by a Participant.

As of November 30, 2018, Reporting Parties must file a short position report with IIROC within two trading days following the calculation date.

Calculation of Short Positions

(a) Report Aggregate Short Position of Each Separate Account Each Reporting Party must:

• report an aggregate short position for each listed or quoted security based on the aggregate short positions in each account
• calculate the short position from each account separately
• not net positions from more than one account even where accounts are for the same beneficial owner
• include odd-lot short positions in the calculation of reported short positions
• calculate short positions using settlement date positions.

(b) Convertible or Exchangeable Securities

A short position in a listed or quoted security which is covered by the holding of a convertible or exchangeable security is still considered to be a short position. This short position must be reported until the convertible or exchangeable security has been tendered or the account holder has issued irrevocable instructions to convert or exchange the security.

Submission Gateway and Enrollment

Submission Gateway

IIROC is creating an SFTP reporting portal (CSPR Portal) that Reporting Parties must use to file their short position reports. Each Reporting Party will be given a unique account to access the CSPR Portal.

Enrollment

In order to file a short position report through the CSPR Portal, each Reporting Party must submit a completed enrollment form to IIROC and successfully complete account set-up and file verification activities.

IIROC expects Reporting Parties to promptly engage in the enrollment process by e-mailing IIROC staff ShortPositionReporting@IIROC.CA as soon as possible and no later than 14 days from the publication date of this notice with the following information:

• name of the Reporting Party and, if applicable, its Participating Organization number (PO number)
• name, e-mail address and telephone number of the contact person at the Reporting Party (preferably someone who is currently involved in the short position reporting process).

IIROC will then contact the Reporting Party to establish connectivity and set out the steps for preproduction file verification. Once enrolled, each Reporting Party is responsible for notifying IIROC regarding any changes to information on the enrollment form.

Should you encounter any issues with respect to filing a short position report after November 30, 2018, please contact IIROC staff by e-mail at ShortPositionReporting@IIROC.CA.

Securities List

Reporting Parties must use the list of securities generated by IIROC for each calculation date to complete their short position reports. This list will be in csv format and will be available on the CSPR Portal for Reporting Parties to download and complete

Submission File

Each Reporting Party must calculate short positions as described above and submit its short position report (in one file for all Exchanges) in csv format to IIROC through the CSPR Portal within two trading days following the calculation date. Only securities in which a Reporting Party has a short position should be included in the report filed with IIROC. If a Reporting Party does not have any short positions to report for a given reporting period, we expect the Reporting Party to submit a nil report to IIROC via the CSPR Portal.

Validation of File Format and File Content

IIROC will only accept reports in the prescribed csv format on the CSPR Portal. All other file formats will be rejected upon receipt and the Reporting Party is expected to submit a corrected report. We will validate the file content of the short position reports against IIROC’s validation rules. IIROC will not accept a file if errors are found during the validation process. Reports that are corrected and submitted after the reporting deadline will be considered late. An acknowledgement will be sent electronically to inform a Reporting Party that its report has been received by IIROC.

User Guide Availability

IIROC intends to publish a user guide that will further detail the connectivity and technical aspects of the CSPR Portal well in advance of the effective date of the Guidance.

Click on the above link for further details.