As we discussed in posts of February 25 and March 18, IIROC has requested comments on proposed
amendments to the UMIR that would, among other
things, repeal short sale price restrictions currently
applicable on Canadian markets. The comment period for the proposed
amendments is quickly drawing to a close and ends on May 26, 2011.
IIROC's proposals would see the repeal of the tick test and
introduce the requirement that all short sales be marked as
such. However, orders from accounts meeting specific requirements
(including certain arbitrage and institutional accounts) would
qualify for a "short-marking
Of particular interest in the notice are IIROC's
comments regarding the disclosure of short sale activity.
Specifically, in response to the IOSCO principle
stating that short selling should be subject to a reporting
regime that provides timely information to the market or market
authorities, IIROC confirms that it recognizes the problems
associated with current short position reporting. IIROC
communicates its intention, therefore, to produce and publicly
release, semi-monthly, short sale summaries based on aggregated
trading data across all marketplaces regulated by IIROC for
orders that are marked as short sales, to be implemented following
the implementation of the proposed amendments. The nature and scope
of this disclosure remains to be seen.
According to IIROC, the CSA and IIROC are proposing to
publish a joint notice to solicit feedback on whether additional
proposals to enhance disclosure of short sales and failed trades in
Canada are required. For example, the joint notice may seek comment
on whether "disclosure of short positions by institutional
investors may be necessary, similar to 'buy-side' reporting
requirements that have been or are being widely implemented in
other jurisdictions" as well as the type, level and frequency
of public disclosure of failed trades in equity securities
traded on all Canadian marketplaces and cleared through CDS.
This subsequent notice on enhanced disclosure, however, has
yet to be published. In the U.S., meanwhile, the SEC recently issued a request for
comment on the feasibility of requiring real-time
reporting of short sale positions of publicly listed securities,
either publicly or only to the SEC and FINRA. In a sign
of what may be to come in Canada, the SEC notice asks specific
questions of market participants, including with respect to the
benefits and costs of real time reporting of
investors' short positions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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