1. A Participant or Access Person shall not, directly or indirectly, engage in or participate in the use of any manipulative or deceptive method, act or practice in connection with any order or trade on a marketplace if the Participant or Access Person knows or ought reasonably to know the nature of the method, act or practice.
2. A Participant or Access Person shall not, directly or indirectly, enter an order or execute a trade on a marketplace if the Participant or Access Person knows or ought reasonably to know that the entry of the order or the execution of the trade will create or could reasonably be expected to create:
   1. a false or misleading appearance of trading activity in or interest in the purchase or sale of the security, the derivative, the related security or related derivative; or
   2. an artificial ask price, bid price or sale price for the security, the derivative, a related security or a related derivative.
3. For greater certainty, the entry of an order or the execution of a trade on a marketplace by a person in accordance with the Marketplace Trading Obligations shall not be considered a violation of subsection (1) or (2) provided such order or trade complies with applicable Marketplace Rules or terms of the contract with the marketplace and the order or trade was required to fulfill applicable Marketplace Trading Obligations.

POLICY 2.2 – MANIPULATIVE AND DECEPTIVE ACTIVITIES

Part 1 – Manipulative or Deceptive Method, Act or Practice

There are a number of activities which, by their very nature, will be considered to be a manipulative or deceptive method, act or practice. For the purpose of subsection (1) of Rule 2.2 and without limiting the generality of that subsection, the following activities when undertaken on a marketplace constitute a manipulative or deceptive method, act or practice:

1. making a fictitious trade;
2. effecting a trade in a security or a derivative which involves no change in the beneficial or economic ownership; and
3. effecting trades by a single interest or group with the intent of limiting the supply of a security or a derivative for settlement of trades made by other persons except at prices and on terms arbitrarily dictated by such interest or group.

If persons know or ought reasonably to know that they are engaging or participating in these or similar types of activities those persons will be in breach of subsection (1) of Rule 2.2 irrespective of whether such method, act or practice results in a false or misleading appearance of trading activity or interest in the purchase or sale of a security or a derivative or an artificial ask price, bid price or sale price for a security or a derivative or a related security or a related derivative.

Part 2 – False or Misleading Appearance of Trading Activity or Artificial Price

For the purposes of subsection (2) of Rule 2.2 and without limiting the generality of that subsection, if any of the following activities are undertaken on a marketplace and create or could reasonably be expected to create a false or misleading appearance of trading activity or interest in the purchase or sale of a security or a derivative or an artificial ask price, bid price or sale price, the entry of the order or the execution of the trade shall constitute a violation of subsection (2) of Rule 2.2:

1. entering an order or orders for the purchase of a security or derivative with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price for the sale of that security or that derivative, has been or will be entered by or for the same or different persons;

2. entering an order or orders for the sale of a security or a derivative with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price for the purchase of that security or a derivative, has been or will be entered;

   (b.1) the prohibition in paragraphs (a) and (b) of Part 2 of Policy 2.2 does not apply to certain pre-arranged trades as determined by the Corporation from time to time

3. making purchases of, or offers to purchase, a security or a derivative at successively higher prices or in a pattern generally of successively higher prices;
4. making sales of or offers to sell a security or a derivative at successively lower prices or in a pattern generally of successively lower prices;
5. entering an order or orders for the purchase or sale of a security or a derivative to:
   1. establish a predetermined sale price, ask price or bid price,
   2. effect a high or low closing sale price, ask price or bid price, or
   3. maintain the sale price, ask price or bid price within a predetermined range;
6. entering an order or a series of orders for a security or a derivative that are not intended to be executed;
7. entering an order for the purchase of a security or a derivative without, at the time of entering the order, having the ability or the reasonable expectation to make the payment that would be required to settle any trade that would result from the execution of the order;

8. entering an order for the sale of a security or a derivative without, at the time of entering the order, having the reasonable expectation of settling any trade on settlement date that would result from the execution of the order;

   (h.1) the prohibition in paragraph (h) of Part 2 of Policy 2.2 does not apply to the sale of a security by:

   1. a person that is deemed to own the security, provided that the Participant has been reasonably informed that the person has a reasonable expectation to deliver such security in such number and form as to permit the settlement of the trade:

      1. as soon as all restrictions on delivery have been removed; and

      2. by no later than thirty-five consecutive calendar days following the trade date;

9. effecting a trade in a security or a derivative, other than an internal cross in a listed security, between accounts under the direction or control of the same person.

If persons know or ought reasonably to know that they are engaging or participating in these or similar types of activities those persons will be in breach of subsection (2) of Rule 2.2 irrespective of whether such activity results in a false or misleading appearance of trading activity or interest in the purchase or sale of a security or a derivative or an artificial ask price, bid price or sale price for a security or a derivative or a related security or a related derivative.

Part 3 – Artificial Pricing

For the purposes of subsection (2) of Rule 2.2, an ask price, bid price or sale price will be considered artificial if it is not justified by real demand or supply in a security or a derivative. Whether or not a particular price is "artificial" depends on the particular circumstances.

Some of the relevant considerations in determining whether a price is artificial are:

1. the prices of the preceding trades and succeeding trades;

2. the change in the:

   1. last sale price,
   2. the price that would be used in the determination of the settlement price for a listed derivative,
   3. best ask price,
   4. or best bid price

   that results from the entry of an order on a marketplace;

3. the recent liquidity of the security or derivative;
4. the time the order is entered and any instructions relevant to the time of entry of the order; and
5. whether any Participant, Access Person or account involved in the order:
   1. has any motivation to establish an artificial price, or
   2. represents substantially all of the orders entered or executed for the purchase or sale of the security or derivative.

The absence of any one or more of these considerations is not determinative that a price is or is not artificial.

2.1 Just and Equitable Principles - Repealed

2.1 Specific Unacceptable Activities

1. Without limiting the generality of any other Rule, a Participant or Access Person shall not:
   1. enter into a transaction for the purpose of rectifying a failure in connection with a failed trade prior to the time that a report must be filed in accordance with Rule 7.10 if the Participant or Access Person knows or ought reasonably to know that such transaction will result in a failed trade; or

   2. when trading a security on a marketplace that is subject to Marketplace Trading Obligations, intentionally entering on that marketplace on a particular trading day two or more orders which would impose an obligation on the person with Marketplace Trading Obligation to

      1. execute with one or more of the orders, or
      2. purchase at a higher price or sell at a lower price with one or more of the orders

      in accordance with the Marketplace Trading Obligations that would not be imposed on the person with Marketplace Trading Obligations if the orders had been entered on the marketplace as a single order or entered at the same time.

2. Without limiting the generality of any other Rule, a Participant shall not:
   1. directly or indirectly use another person to effect a trade other than on a marketplace in circumstances when an exemption is not available for the Participant to complete the trade other than on a marketplace in accordance with Rule 6.4;
   2. make a pattern of trading in a particular security with knowledge of an expression of interest by a client in that particular security; or
   3. without the specific consent of the client, enter client orders and principal orders in such a manner as to attempt to obtain execution of a principal order in priority to the client order.
3. A Participant or Access Person shall not enter an order on a marketplace that is intended to execute as a pre-arranged trade or an intentional cross without the prior approval of a Market Regulator if the pre-arranged trade or intentional cross would be undertaken at a price that will be:
   1. less than the lesser of 95% of the best bid price and the best bid price less 10 trading increments; or
   2. more than the greater of 105% of the best ask price and the best ask price plus 10 trading increments.
4. As a condition for granting approval of the pre-arranged trade or intentional cross for the purposes of subsection (3), the Market Regulator may require the Participant or Access Person to enter a series of orders on one or more protected marketplaces over a period of time considered reasonable by the Market Regulator in order to move the market price to the price at which the pre-arranged trade or intentional cross will occur and that time period will generally be not less than:
   1. 5 minutes if the price variation from the best ask price or best bid price, as applicable, is more than 5% but less than 10%; and
   2. 10 minutes if the price variation is 10% or more.

POLICY 2.1 – Just and Equitable Principles - Repealed

In the event of a conflict between a provision of UMIR or any Policy and the provision of a Marketplace Rule or the functionality of the trading system of any marketplace, UMIR shall govern unless otherwise provided by the securities regulatory authority.

1. To the extent permitted by law, the Market Regulator shall be indemnified and saved harmless by a Subject Person from and against all costs, charges and expenses (including an amount paid to settle an action or satisfy a judgment and including legal and professional fees and out of pocket expenses of attending trials, hearings and meetings), whatsoever that the Market Regulator sustains or incurs in or about any action, suit or proceeding, whether civil, criminal or administrative, and including any investigation, inquiry or hearing, or any appeal or review, that is threatened, brought, commenced or prosecuted against a Protected Party or in respect of which a Protected Party is compelled or requested to participate, for or in respect of any act, deed, matter or thing whatsoever made, done or permitted by the Subject Person.
2. To the extent permitted by law, all costs, charges and expenses in respect of which the Market Regulator is indemnified pursuant to subsection (1) shall be paid to the Market Regulator by the Subject Person within 90 days after receiving the written request of the Market Regulator.
3. The Market Regulator shall not be liable to any Subject Person for any loss, damage, cost, expense or other liability or claim arising from any:
   1. failure of any system owned, operated or used by the Market Regulator; or
   2. act done in good faith in the exercise or intended exercise of any power or in the performance or intended performance of any duty or for any neglect, default or omission in the exercise or performance in good faith of any such power or duty by a Protected Party.
4. Subject to subsection (5), no Subject Person shall be entitled to commence or carry on any action or proceeding in respect of any penalty or remedy imposed by an order or interim order or in respect of any act done or omitted under the provisions of and in compliance with, or intended compliance with, UMIR and any Policy as against a Protected Party.
5. Subsection (4) shall not restrict or limit the ability of any person to apply for a review in accordance with Rule 11.3 of a direction, order or decision of a Market Regulator or Market Integrity Official.

UMIR does not apply to:

1. any order entered and executed on a marketplace provided the order has been entered and executed in compliance with the Marketplace Rules of that marketplace as adopted in accordance with Part 7 of the Trading Rules; and
2. any order entered and executed on a marketplace or otherwise provided the order has been entered and executed in compliance with:
   1. the rules of an applicable regulation services provider as adopted in accordance with Part 8, 9 or 10 of the Trading Rules, or
   2. the terms of an exemption from the application of Part 8, 9 or 10 of the Trading Rules.

The accidental omission to give any notice to any person or the failure of a person to receive any notice or an error in any notice not affecting the substance of the notice does not invalidate any action founded or taken on the basis of such notice.

Any person may waive any notice that is required to be given to such person and such waiver, whether given before or after the meeting, hearing or other event of which notice is required to be given, shall cure any default in giving such notice.

1. In computing the time when a notice must be given or for the doing of anything or taking any proceeding under any provision of a Requirement requiring that a notice be given a specified number of days prior to any meeting, hearing, action or proceeding or that any action be done or proceeding taken within a specified number of days after some event, the date of giving of the notice or of such event shall be excluded and the date of the meeting, hearing, doing of the act or taking of the proceedings shall be included.
2. Where the time limited for a proceeding or the doing of anything under any provision of a Requirement expires or falls upon a day that is not a trading day, the time so limited extends to and the thing may be done on the next day following that is a trading day.

1. If the Market Regulator has determined that a Subject Person, other than a marketplace for which the Market Regulator is or was the regulation services provider, has engaged in, or may engage in, any course of conduct that is or may be a contravention of a Requirement, the Market Regulator may, if the Market Regulator considers it is necessary for the protection of the public interest by an interim order without notice or hearing, order the restriction or suspension of access to the marketplace upon such terms and conditions, if any, considered appropriate provided such interim order shall expire 15 days after the date on which the interim order is made unless:
   1. a hearing is commenced pursuant to Corporation Rule 8200 (Enforcement Proceedings) within that period of time to confirm or set aside the interim order;
   2. the person against which the interim order is made consents to an extension of the interim order until a hearing of the matter is held; or
   3. an applicable securities regulatory authority directs that the interim order be rescinded or extended.
2. For the purposes of this section, the restriction, suspension or revocation of access of a person to a marketplace may be imposed directly on the person and, if the person is an individual, the restriction, suspension or revocation of access may also be imposed in respect of their capacity as a director, officer, partner, employee or associate of a person with access to a marketplace.
3. For greater certainty, any enforcement or disciplinary proceeding or any order or interim order as against a person by a Market Regulator for contravention of a Requirement shall not affect or limit any enforcement or disciplinary action as against the person by any securities regulatory authority, self-regulatory entity or other Market Regulator with jurisdiction over the person.
4. If a Market Regulator restricts, suspends or revokes the access of any person to a marketplace in accordance with this section, such person shall be denied access to any other marketplace and shall have any access to any other marketplace automatically restricted, suspended or revoked unless the applicable securities regulatory authority otherwise determines in a review or appeal of the order or interim order of the Market Regulator undertaken in accordance with Rule 11.3.
5. If a Market Regulator restricts, suspends or revokes the access of any person to a marketplace, the Market Regulator shall provide notice forthwith of such restriction, suspension or revocation to:
   1. the person whose access has been restricted, suspended or revoked;
   2. each marketplace;
   3. each Market Regulator; and
   4. each applicable securities regulatory authority.