The Investment Industry Regulatory Organization of Canada (IIROC) provided guidance on the obligation of a market participant to have reasonable expectations, prior to the entry of a short sale order, that sufficient securities will be available to allow the participant to settle any resulting trade on settlement date.
The notice confirms that the entry of a short sale order by a participant without a reasonable expectation that they will have access to sufficient securities to settle any resulting trade on settlement date, which generally is two days following the trade date, is prohibited as “Manipulative and Deceptive Activities”.