Facilitation of a Client Special Settlement Trade and Double Printing

1. Prohibition on double printing

UMIR Rule 2.2 prohibits any manipulative or deceptive method of trading. The term “double printing” applies when two trades are made on a marketplace when only one trade was necessary to execute the order.

CIRO has issued additional Guidance Notes1 in relation to this concept, confirming that double printing is considered to create a false or misleading appearance of trading activity contrary to UMIR Rule 2.2.

2. Facilitation of a client special settlement trade

In the ordinary course, a Participant would need to execute a special settlement trade for a client as a “Special Terms Order”2 on a marketplace when settlement does not occur on T+1. However, even if the price of the order is priced more favorably than regular settlement orders, there is no guarantee that this order would be executed.

To ensure a timely execution of the trade, a client may request that a Participant facilitate a special settlement on the purchase or sale of a security. This requires that the Participant execute a Special Terms Trade with the client as principal and then immediately unwind its position with a further principal trade in the regular market.

UMIR Rule 6.4 requires a Participant, acting as principal or agent, to trade in a listed security only by means of the entry of an order on a marketplace, unless the trade is specifically exempted under that Rule. UMIR Rule 6.4 would appear to require that the Participant print both the special settlement trade from the client and the regular settlement unwinding trade to a marketplace.

In order to avoid the appearance of “double printing”, a Participant should not execute the special settlement trade on a marketplace if, concurrent with the execution of the special settlement trade, the Participant executes a regular settlement (T+1) trade as principal on a marketplace at the same price and volume.

An exemption from Rule 6.4 of UMIR will not be required if a Participant executes the special settlement trade as principal with the client “off-marketplace” and the Participant executes an unwinding trade on a marketplace as principal for regular settlement provided the unwinding trade is:

• undertaken concurrent with the execution of the special settlement trade;
• at the same price as the special settlement trade;
• for the same volume as the special settlement trade; and
• compliant with all Requirements, including UMIR Rule 2.2.

In these circumstances, the Participant must ensure that its audit trail reflects the concurrent nature of the trades. If the unwinding trade is not at the same time, price and volume, the Participant must execute the special settlement trade as principal on a marketplace as a Special Terms Order.

In practical terms, CIRO recognizes that the “unwinding” trade on a marketplace must be executed first in order to establish the price and volume for the special settlement trade.

If the unwinding trade by the Participant involves the Participant selling as principal, the sale will not be considered a “short sale”3 if the special settlement trade will be settled prior to the settlement of the unwinding trade. This would only be the case if the special settlement trade is intended to settle on trade date (T); in all other cases, the sale will be considered a “short sale” unless the Participant otherwise has a long position in the security that can be delivered on settlement date.

3. Applicable Rules

UMIR Rules this Guidance Note relates to:

• UMIR 2.2
• UMIR 6.4

4. Previous Guidance Note(s)

This Guidance Note replaces:

• Market Integrity Notice 2006-004 – Facilitation of a Client Special Settlement Trade and Double Printing (February 6, 2006).

5. Related Documents

This Guidance Note is related to the following Guidance Notes:

• GN-URPart2-25-0001– Avoiding Double Printing in the Use of an Error Account (August 19, 2025)
• GN-URPart2-25-0002 – Guidance on Double Printing (November 5, 2025)

• 1See GN-URPart2-25-0002 - Guidance on Double Printing and GN-URPart2-25-0001 Avoiding Double Printing in the Use of an Error Account.
• 2See UMIR 1.1 definition of a “Special Terms Order”.
• 3See UMIR 1.1 definition of a “short sale”.