Decisions
Financial Sector Issuers [Order]
|
BCSECCOM #:
2008 BCSECCOM 517
|
Document Type:
Order
|
|
Published Date:
2008-09-19
|
Effective Date:
2008-09-19
|
|
Details:
|
|
2008 BCSECCOM 517
Click on the Adobe icon to launch the Acrobat Reader
2008 BCSECCOM 517
Order
Financial Sector Issuers
[as listed in Schedule A]
Sections 161(1) and 167.6 of the Securities Act, RSBC 1996, c. 418
[as listed in Schedule A]
Sections 161(1) and 167.6 of the Securities Act, RSBC 1996, c. 418
Introduction
¶ 1 This is an order under sections 161(1) and 167.6 of the Securities Act, RSBC 1996, c. 418.
Background
¶ 2 On September 18, 2008, the United States Securities and Exchange Commission issued an order under section 12(k)(2) of the Securities Exchange Act of 1934 (the SEC Order) prohibiting short sales in the securities of a defined list of financial firms, subject to certain exceptions.
¶ 3 On September 19, 2008, the Ontario Securities Commission issued an order under section 127 of the Ontario Securities Act, R.S.O. 1990, s. S.5 (the Ontario Order) temporarily prohibiting any short sale in the securities of the financial sector issuers listed in Schedule A (the Financial Sector Issuers).
Order
¶ 4 The Commission, considering that it would be in the public interest to make an order on the same terms as the Ontario Order, orders under section 161(1) and 167.6 of the Act that, for a period expiring on October 3, 2008, trading that constitutes a short sale (as defined in Schedule B) in the securities of the Financial Sector Issuers is prohibited, unless the short sale is:
- 1. conducted in accordance with UMIR Rule 3.1 Restrictions on Short Selling, sections 2(a), (b), and (d);
2. conducted in order to comply with UMIR Rule 5.2 Best Price Obligation; or
3. conducted by a person or company as a result of the automatic exercise or assignment of an equity option held prior to the effectiveness of this order due to expiration of the option.
¶ 5 September 19, 2008
¶ 6 Douglas M. Hyndman
Chair
Schedule A
List of Financial Sector Issuers
List of Financial Sector Issuers
| Name | Root Ticker |
| Aberdeen Asia-Pacific Income Investment Company Ltd. | FAP |
| Bank of Montreal | BMO |
| Bank of Nova Scotia (The) | BNS |
| Canadian Imperial Bank of Commerce | CM |
| Fairfax Financial Holdings Limited | FFH |
| Kingsway Financial Services Inc. | KFS |
| Manulife Financial Corporation | MFC |
| Quest Capital Corp. | QC |
| Royal Bank of Canada | RY |
| Sun Life Financial Inc. | SLF |
| Thomas Weisel Partners Group Inc. | TWP |
| Toronto-Dominion Bank (The) | TD |
| Merrill Lynch & Co., Canada Ltd. | MLC |
Schedule B
“short sale” means a sale of a security, other than a derivative instrument, which the seller does not own either directly or through an agent or trustee and, for this purpose, a seller shall be considered to own a security if the seller:
- (a) has purchased or has entered into an unconditional contract to purchase the security, but has not yet received delivery of the security;
(b) has tendered such other security for conversion or exchange or has issued irrevocable instructions to convert or exchange such other security;
(c) has an option to purchase the security and has exercised the option;
(d) has a right or warrant to subscribe for the security and has exercised the right or warrant; or
(e) is making a sale of a security that trades on a when issued basis and the seller has entered into a contract to purchase such security which is binding on both parties and subject only to the condition of issuance of distribution of the security,
but a seller shall be considered not to own a security if:
- (f) the seller has borrowed the security to be delivered on the settlement of the trade and the seller is not otherwise considered to own the security in accordance with this definition;
(g) the security held by the seller is subject to any restriction on sale imposed by applicable securities legislation or by an Exchange or QTRS as a condition of the listing or quoting of the security; or
(h) the settlement date or issuance date pursuant to:
(i) an unconditional contract to purchase,
(ii) a tender of a security for conversion or exchange,
(iii) an exercise of an option, or
(iv) an exercise of a right or warrant
would, in the ordinary course, be after the date for settlement of the sale.
Terms used in this schedule that are defined in the Universal Market Integrity Rules (UMIR) have the meaning ascribed to them in UMIR.