Sept. 22, 2008
SAINT JOHN (CNB) - A decision temporarily prohibiting the short-selling of securities of 13 financial-sector issuers was issued today by the New Brunswick Securities Commission (NBSC). These issuers are listed on the Toronto Stock Exchange, and, with the exception of one issuer whose shares are interchangeable, are inter-listed in the United States.
The action reciprocates an order made by the Ontario Securities Commission on Friday, Sept. 19, which supports similar action taken by the U.S. Securities and Exchange Commission and the U.K. Financial Services Authority last week. Other members of the Canadian Securities Administrators are expected to take similar actions.
Short-selling is a complicated form of trading that makes money for the short-seller when a stock's price goes down rather than up. However, the potential for suffering significant losses is substantial.
"Short-selling is an accepted investment technique in normal market conditions," said Donne Smith, NBSC chair and CEO. "However, given the recent turmoil in the American financial markets, the NBSC felt it was prudent to act in conjunction with our other regulatory partners. This preventative measure will inspire calm and integrity, and guard against instability in Canada's capital markets.
"Our mandate is to protect investors and New Brunswick's capital markets. We feel that it is in the public's best interest to reciprocate the OSC's order."
The issuers affected are: Aberdeen Asia-Pacific Income Investment Company Ltd.; Bank of Montreal; Bank of Nova Scotia; Canadian Imperial Bank of Commerce; Fairfax Financial Holdings Ltd.; Kingsway Financial Services Inc.; Manulife Financial Corp.; Quest Capital Corp.; Royal Bank of Canada; Sun Life Financial Inc.; Thomas Weisel Partners Group Inc.; Toronto-Dominion Bank; and Merrill Lynch and Co., Canada Ltd.
The decision is in effect until Oct. 3, and is available on the NBSC's website.
The NBSC is the Crown corporation that regulates the securities industry in New Brunswick. It is funded indirectly by investors through industry. Its mandate is to protect investors from unfair, improper or fraudulent practices, and foster fair and efficient capital markets, as well as confidence in those markets.
MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045 or 1-866-933-2222, e-mail: Michelle.Robichaud@nbsc-cvmnb.ca.