Proposed Amendments Respecting the Reasonable Expectation to Settle a Short Sale
The Canadian Investment Regulatory Organization (CIRO) is proposing to support and clarify the short selling framework under UMIR by:
- adding a new positive requirement in UMIR 3.3 to have prior to order entry, a reasonable expectation to settle on settlement date any order that upon execution would be a short sale
- adding supervisory and gatekeeper requirements pertaining to the proposed requirement in UMIR 3.3
- consolidating other current provisions related to short selling to a common location within UMIR (Proposed Amendments).
To provide further clarity and a more complete view of the resulting regulatory framework, we are simultaneously publishing proposed guidance for comment (GN-URPart3-24-0001) that clarifies various current and proposed requirements related to short sales and failed trades (Proposed Guidance).
Along with CSA staff, we will continue to explore other areas of short sale regulations where additional regulatory measures may be appropriate, including but not limited to mandatory close-out requirements. Any additional proposed requirements would be introduced separately and published for comment as part of the policy development process.