News Release

SIMA responds to proposed changes to OSC rule governing abusive trading practices

September 17, 2025 (Toronto) — The Securities and Investment Management Association (SIMA) today submitted comprehensive feedback to the Ontario Securities Commission (OSC) on proposed amendments to OSC Rule 48-501, which governs trading during distributions, formal bids, and share exchange transactions.

SIMA supports the OSC’s objective of enhancing market integrity by targeting manipulative and deceptive trading practices, particularly abusive short selling of securities. However, SIMA warns that the proposed amendments could unintentionally hinder capital formation in Ontario, lead to wider pricing discounts, and impose significant compliance and operational burdens on industry participants.

We recognize the importance of a fair, safe market and protecting investors, but these proposed amendments could disrupt efficient capital-raising and reduce investor participation. In addition, the changes could make capital markets in Ontario less competitive than other jurisdictions.

Instead of bringing in broad new restrictions, SIMA encourages the OSC to identify targeted refinements and enhanced enforcement of the existing rules. This would effectively address concerns without stifling market innovation and growth.

SIMA’s key concerns about the proposed amendments:

• The complexity, duplication of regulatory efforts, and potential fragmentation without a uniform national approach could increase costs and reduce access to capital.
• Dealers should not bear new gatekeeper responsibilities to monitor client exemptions or overall trading conduct, which may be impractical and unreasonable given their limited visibility across intermediaries. Responsibility should rest with individual market participants.
• Bought deals and private placements should be exempted as their structures differ significantly from marketed offerings and do not present the same risks of abusive short selling.
• The definition of “short sale” should align with existing market regulation to avoid chilling legitimate trading strategies.
• The five-day restricted period modelled on U.S. Rule 105 may not appropriately reflect Canadian market realities and should not be extended post-pricing.

About SIMA

The Securities and Investment Management Association empowers Canada’s investment industry.  The association is the leading voice for the securities and investment management industry, which oversees approximately $4 trillion in assets for over 20 million investors and the Canadian capital markets. Our members—including investment fund managers, investment and mutual fund dealers, capital markets participants, and professional service providers—are committed to creating a resilient, innovative investment sector that fuels long-term economic growth and creates opportunities for all Canadians.

For more information

Christine Harminc
Director, Communications and Public Affairs
charminc@sima-amvi.ca
416-309-2313