Effective October 15, 2012, IIROC's price restrictions that
prohibit short sales on a "downtick" are being repealed.
The repeal of the "tick test" has been in the works for a
number of years, since similar action was taken by the U.S. Securities and
Exchange Commission to repeal short sale restrictions
in 2007. Although, unlike the U.S. rules, IIROC has not
incorporated a circuit breaker that would trigger a tick test. In
certain circumstances, however, a pre-borrow requirement for short
sales, which requires a person entering the order to have made
arrangements to borrow the securities required to settle the trade
prior to the entry of the order, is imposed.
IIROC also published a notice yesterday
to provide guidance on using "short sale" and
"short-marking exempt" order designations. Of
particular interest, the notice provides guidance with respect to
the information on which a Participant may rely in determining
whether an account may use the "short-marking exempt"
designation. The guidance further provides a list of IIROC's
answers to common questions regarding the order designations.
Meanwhile, earlier this week, IIROC published a notice
to answer specific questions regarding upcoming changes to the
rules respecting dark liquidity on Canadian markets. As we've discussed in the past, also effective October 15, UMIR is being
amended to provide that (i) visible orders will have execution
priority over dark orders on the same marketplace at the same
price; (ii) in order to trade with a dark order, smaller
orders must receive a minimum level of price improvement; and
(iii) IIROC will have the ability to designate a minimum
size for dark orders. The FAQ released by IIROC answer
questions regarding the priority of order execution, marking orders
and international crosses.
The Alberta Court of Appeal recently decided that a corporate director who was found to have made negligent misstatements about the management team’s knowledge, expertise and competence to operate its business, was not personally liable in tort.
As a result of renewed efforts to enforce Canada’s "Corruption of Foreign Public Officials Act" and the most-recent proposed amendments to the Act earlier this year to extend jurisdiction to Canadian corporations’ activities abroad, boards of directors, senior management, and internal auditors have been encouraged to renew their efforts to protect their companies from the legal and reputational risks associated with breaches of our anti-corruption legislation.
The Canadian Securities Administrators recently published final amendments to their securities rules that will expand the scope of marketing activities that can be conducted in connection with prospectus offerings.
In a case that upholds the Supreme Court of Canada's notion that there is no presumption that the scope of an employee's authority includes the commission of unlawful acts, an Alberta Master has summarily dismissed a case based in vicarious liability.