CANADA: IIROC proposes amendment to Short-marking Exempt Order Definition

Wednesday August 5 2015

On 16 July 2015, the Investment Industry Regulatory Organisation of Canada (IIROC) requested comments on proposals to amend the Universal Market Integrity Rules (UMIR) to broaden the definition of a short-marking exempt order (‘SME order’) to include an order for an Exempt Exchange-traded Fund (ETF) or one of its underlying securities for the principal account of a participant that:

• has Marketplace Trading Obligations for the ETF security; or
• has entered into an agreement with the ETF issuer to maintain a continuous distribution of the ETF and the account for this purpose at the end of each trading day has no more than a ‘minimal exposed risk’.

The expansion of the SME order definition is intended to:

• simplify and promote uniform SME marking standards for ETF market makers engaging in similar activities;
• assist in preserving the integrity of short selling data used and published by IIROC; and
• avoid unnecessary administrative burden to the ETF market making function.

If approved the Proposed Amendment would be effective no earlier than 60 days after publication of the Notice of Approval.

Click on the above link for further details.