The OSC and SEC have changed the expiry dates of their emergency
orders on short selling and issuer repurchases of their own
securities as follows:
The orders prohibiting short selling of certain financial
firms' securities will be in place in both jurisdictions
only until 11:59 p.m. tomorrow, October
The relaxed restrictions on issuer repurchases of their own
securities will be in place in both jurisdictions until 11:59 p.m.
on October 17, 2008.2
The SEC expects to publish rules to keep in place the
requirement for institutional money managers to report new short
sales of "section 13F securities." For now, reports filed
under the emergency order will be disclosed only to the SEC, not
made public two weeks after filing as originally
The SEC's order prohibiting naked short selling of equity
securities will be in place until 11:59 p.m. on October 17,
Upon expiry of the OSC's order, short sales of financial
firms' securities will be permitted in Canadian marketplaces
under existing Canadian rules. Although these rules generally
provide that short sales of securities cannot be made unless the
price is at or above the last sale price for that security (or
unless certain other exemptions apply), there is an exemption from
these price restrictions for securities that are interlisted on a
Canadian and a U.S. stock exchanges.
Canada's marketplace regulator, IIROC, published a notice on
October 6, 2008 reminding marketplace participants that under
Canadian rules that will continue to apply following expiry of the
OSC's order, if a market participant is aware that a particular
security is not available to be borrowed, no short sales of that
security can be made by the participant. Furthermore, if a market
participant makes a short sale that fails because the required
securities cannot be borrowed for settlement, no further short
sales of that security can be made by the participant unless
adequate arrangements have been made to borrow the securities
required for the settlement of the short sale.
In light of current market conditions and the above regulatory
developments, we expect that Canadian securities regulators will be
carefully reviewing amendments to the short-selling rules that were
originally proposed last year. Details about these proposals can be
found in New Rules on Short Selling: Canada Regains Its
Advantage (November 5, 2007).5
2.The relief granted by the TSX applies only to Canadian
issuers that are interlisted on a U.S. stock exchange. Details can
also be found in Torys' bulletin of September 23, 2008 (see
footnote 1 above).
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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