45Short‑selling prohibited

45 Short‑selling prohibited

(1) A passport fund must not sell or be under an obligation to transfer a passport fund asset unless, at the time of the sale: (a) the passport fund has a presently exercisable and unconditional right to give title to the asset to the buyer (a transferable title); or (b) the passport fund has an agreement to buy the asset to be sold that: (i) will enable the passport fund to acquire a transferable title to the asset before it is to be transferred; and (ii) is conditional only on: (A) payment of the consideration; or (B) the exercise of an option on the part of the passport fund; or (C) receipt of the proper instrument of transfer or receipt of the title documents. (2) For subsection (1), a transferable title to an asset, or an agreement to buy an asset that meets the conditions in paragraph (1)(b), may only support one agreement to transfer the asset or equivalent asset including by way of sale or under a securities lending arrangement.