Market Regulation

To ensure effective and independent marketplace integrity, TSX, TSXV and TSXA outsource market surveillance and participant discipline to an independent third party: Canadian Investment Regulatory Organization (CIRO), monitors all trading on TSX, TSXV and TSXA. CIRO is recognized by the applicable securities commissions as a self-regulatory organization to monitor and regulate trading of equity securities on those marketplaces that retain CIRO to be their regulation services provider. CIRO is a Canadian, not-for-profit organization that, among other things, oversees trading in exchanges and marketplaces. This surveillance model promotes fairness and integrity in trading across equity marketplaces in Canada. The only North American regulator that protects investors in real time, CIRO uses sophisticated surveillance systems that provide statistical and rule-based alerts - ensuring transactions are executed properly, fairly and in compliance with CIRO's "universal" market integrity rules (UMIR).

Prior to the inception of CIRO's predecessor organization Market Regulation Services Inc. (RS), each exchange regulated trading on its own marketplace with its own set of market integrity rules, some of which were similar and some of which varied from exchange to exchange.

RS introduced the Universal Market Integrity Rules (UMIR) as a common set of equities trading rules designed to ensure fairness and maintain investor confidence. The UMIR continue to be CIRO's market integrity rules.

These rules essentially create the framework for the integrity of trading activity on marketplaces and allow for the competitive operation of exchanges, quotation and trade reporting systems (QTRSs) and alternative trading systems (ATSs) in Canada. UMIR has been established to regulate various trading practices, including manipulative or deceptive methods of trading, short selling, front running, best execution obligations, order entry and order exposure, as well as trading halts, delays and suspensions.

UMIR seeks to foster trading of securities in a fair and transparent manner. The cornerstone of these integrity rules is universality, in that UMIR:

• Applies to trading on any Canadian marketplaces that retain CIRO as their market regulation services provider
• Cannot be circumvented by directing trading activity to another marketplace
• Applies to trading of all forms of listed or quoted securities
• Incorporates exceptions to the rules to accommodate the workings of an individual marketplace or ATS

UMIR (and its predecessor RS) was established through a consultative process involving industry representatives, legal and compliance officers, the exchanges, trade association representatives, and the provincial securities commissions. Since markets are dynamic, not static, there is a constant need to evaluate possible changes or revisions to the rules to ensure market integrity. UMIR and its companion policies are reviewed and updated by CIRO in consultation with CIRO's Market Rules Advisory Committee.