The Ontario Securities Commission issued a temporary order on Friday prohibiting short selling of securities of certain financial sector issuers that are listed on the Toronto Stock Exchange and are also interlisted in the United States, with the exception of one issuer whose shares are interchangeable.

“We want to make it clear that we will take the appropriate steps necessary to protect our markets and ensure that they are not used for purposes of regulatory arbitrage,” said OSC chairman David Wilson. “We will monitor trading in securities of other Canadian financial issuers and take action if necessary.”

This order is being issued as a precautionary matter with respect to short selling of the securities of financial sector issuers subject to the U.S. Securities and Exchange Commission short-selling order.

The OSC took the action in its capacity as lead regulator of the TSX. This OSC action supports similar action taken by the SEC earlier on Friday. Britain’s Financial Services Authority took similar action this week.

The issuers affected are: Aberdeen Asia-Pacific Income Investment Company Ltd., Bank of Montreal, Bank of Nova Scotia, CIBC, Fairfax Financial Holdings Ltd., Kingsway Financial Services Inc., Manulife Financial Corp., Quest Capital Corp., Royal Bank of Canada, Sun Life Financial Inc., Thomas Weisel Partners Group Inc., TD Bank Financial Group, and Merrill Lynch & Co., Canada Ltd.

The Canadian Securities Administrators then indicated support related to the issuance of the Ontario Securies Commission’s temporary order.

“The CSA is supportive of the action taken by the OSC,” said Jean St-Gelais, chairman of the CSA and president and CEO of the Autorité des marchés financiers. “Other jurisdictions in the CSA will be taking similar action today, or in the coming days.”