3.3 Reasonable expectation to settle prior to the entry of an order for a short sale
- Before entering an order on a marketplace to sell a security that on execution would result in a short sale, a Participant or Access Person must have a reasonable expectation to settle any resulting trade on the date contemplated on the execution of the trade.
- Subsection (1) does not apply to the short sale of a security by:
- 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:
- as soon as all restrictions on delivery have been removed; and
- by no later than thirty-five consecutive calendar days following the trade date;
- 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:
Defined Terms:
NI 21-101 section 1.1 – “order”
NI 21-101 section 1.4 – Interpretation -- “security”
UMIR section 1.1 – “Access Person”, “marketplace”, “Participant”, “Policy”, and “short sale”.
UMIR section 1.2(2) – “trade”
On November 15, 2024, the applicable securities commissions approved amendments to UMIR to add a new positive requirement to have, prior to order entry, a reasonable expectation to settle on settlement date any order that upon execution would be a short sale. See CIRO Bulletin 24-0349 – “Amendments Respecting the Reasonable Expectation to Settle a Short Sale” (December 5, 2024).
Effective August 11, 2026, the applicable securities commissions approved amendments to UMIR 3.3 to add a new deemed-to-own exception with respect to the requirement to have a reasonable expectation to settle. See CIRO Bulletin 26-0067 – “Amendments Respecting Reasonable Expectations to Settle Short Sales” (April 2, 2026).