TSX Market Making Program Guide

TSX Market Making Program Guide Responsibilities of Market Makers TMX Group Page 23 b) WITH ROFR RIGHTS. If a more competitive bid is received, the incumbent Market Makers have “right of first refusal” to match the more competitive bid. The right of first refusal only applies if the incumbent Market Makers: i. At the time of the request, have performed successfully for a minimum of 3 months on the assignment, AND ii. At the time of the request, have less than two underperforming months on the assignment, AND iii. the request is the result of either a corporate action, or a significant and permanent change of business to the issuer that affects its liquidity profile, or in the sole opinion of TSX, another valid reason exists. (collectively, the “ROFR Criteria”). c) WITHOUT ROFR RIGHTS. If not ALL of the ROFR Criteria are satisfied, the incumbent Market Makers do NOT have “right of first refusal” to match and the security is awarded to the Market Makers with the most competitive bids. Market Makers that are underperforming on their Performance Obligations may voluntarily enter this process for adjusting Performance Obligations before the end of the second underperforming month. Beyond that time, the underperformance policy applies. 3.3.2 Automatic Adjustments Automatic adjustments to levels occur in the following cases: a) Where a price increase on an assignment results in a reduction of its board lot size, any existing TOB volume size targets that become greater than 100 board lots due to the board lot change are reduced automatically to 100 board lots on the day the stock begins trading at the smaller board lot size. b) Where an assignment closes at $0.50 or higher, and the existing Spread Goal target is less than $0.02, the Spread Goal target is increased to $0.02 on the next trading day. The above adjustments are intended to keep targets in line with maximum bidding levels. 3.3.3 TMX-initiated stock level targets TSX, from time to time, assesses existing Market Maker performance targets and, where a stock split or decrease in price on an assignment results in an increase in board lot size or a price change from above $0.50 to below $0.50, TSX may request the Market Makers to increase their existing targets accordingly. Should the incumbent Market Makers not wish to increase their targets as requested by TSX, TSX may, in its sole discretion, place the assignment into the next competitive bid process that is no less than 15 days from notification of the requested target change(s).