Document ID: chunk:federal_register_of_legislation:F2023C00208:reg:17:p5
Version: federal_register_of_legislation:F2023C00208
Segment Type: reg
Provision Reference: reg 17 (pt 5/14)
Character Range: 11928–14658

has been appointed to make a market in the approved ETO by the operator of the market that the approved ETO is admitted to trading on;
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(5B) The market maker must only engage in the conduct covered by and in reliance on subsection (5A) if, at the time of the sale, the market maker believes on reasonable grounds that either:
                (a) for any shorted product—before the time for delivery of the shorted product, a securities lending arrangement in relation to financial products in the same class as the shorted product can be put in place so that the shorted product can be unconditionally vested in a buyer by the time for delivery; or
                (b) for a shorted product that is an interest in STW or an approved ETF—before the time for delivery of the interests in STW or the approved ETF, the market maker can acquire or apply for a sufficient number of interests in STW or the approved ETF so that the shorted product can be unconditionally vested in a buyer by the time for delivery.
           (5C) The market maker must do at least one of the following things by the end of the day (sale day) on which the market maker makes the sale of the shorted product in reliance on subsection (5A) so that the shorted product can be unconditionally vested in a buyer by the time for delivery:
                (a) for any shorted product—have acquired a financial product in the same class as the shorted product; or
                (b) for any shorted product—have entered into a contract to buy a financial product in the same class as the shorted product where the market maker has a right to have that financial product vested in the market maker that is conditional only upon all or any of the following:
                   (A)  payment of the consideration in respect of the purchase;
                   (B)  the receipt by the market maker of a proper instrument of transfer in respect of the product;
                   (C)  the receipt by the market maker of the documents that are, or are documents of title to, the product; or
                (c) for any shorted product—have entered into a securities lending arrangement in relation to financial products in the same class as the shorted products; or
                (d) for a shorted product that is an interest in STW or an approved ETF—have acquired or applied for interests in STW or the approved ETF.
(5D) A market maker that fails to comply with subsection