Proposed Amendments Respecting Mandatory Close-Out Requirements

The Canadian Investment Regulatory Organization (CIRO) is proposing amendments to the Universal Market Integrity Rules (UMIR) and Investment Dealer Partially Consolidated Rules (IDPC) that would require applicable Dealer Members that are Investment Dealers (Investment Dealer Members) to:

• close out a fail-to-deliver position in the event of a settlement failure in a listed security at the  recognized clearing agency by specified timelines by buying or borrowing shares,
• pre-borrow the affected security where there has been a failure to close out by specified timelines for all future short sales in the security at issue,
• provide certain reporting and notifications in connection with mandatory close-out requirements, and
• have a reasonable expectation to settle on settlement date for Investment Dealer Members that are not Participants under UMIR (Proposed Amendments).