IIROC releases study on effects of short sale circuit breakers

March 5, 2012

Last week, the Investment Industry Regulatory Organization of Canada released a study that considered whether short selling activity on Canadian markets of inter-listed securities is affected by the triggering of short sale circuit breakers in the U.S. Specifically, the study sought to determine whether cases of U.S. circuit breakers being triggered during the study period in early 2011 resulted in any systemic redirection of short selling activity to Canadian markets.

Ultimately, the study found that such circuit breaker events in the U.S. had minimal effects on short selling activity on Canadian markets. According to IIROC, the results of the study and other studies on the subject demonstrate that Canada has not had the problems with short sales and failed trades experienced in other jurisdictions.

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