Reply from IROC:

Please note that naked short sales are not permitted in Canada. The Investment Industry Regulatory Organization of Canada ("IIROC"), UMIR Policy 2.2 Part 2 (h) provides that it is manipulative and deceptive to "enter an order for the sale of a security without, at the time of entering the order, having the reasonable expectation of settling any trade that would result from the execution of the order". In addition, National Instrument 24-101 Part 7 states that "A registered dealer shall not execute a trade unless the dealer has established, maintains and enforces policies and procedures designed to facilitate settlement of the trade on a date that is no later than the standard settlement date for the type of security traded prescribed by an SRO or the marketplace on which the trade would be executed