21 For greater certainty, all Market Makers are assessed at the beginning of every month using the Reassignment Threshold in respect of the immediately preceding 3 months. TSX may adjust the Reassignment Threshold with advance notice. 3.3 Adjustments to Corporate Equities Performance Obligations Performance Obligations for corporate equities assignments are first established through the competitive bidding process and become the responsibility of both the assigned Market Makers once a security is successfully assigned. There are several procedures whereby these performance targets can be adjusted as prescribed below. 3.3.1 Voluntary Rebid The assigned Market Makers may voluntarily submit a security to the next month’s bidding process. Generally, a request for adjustment to Performance Obligations is processed in one of the following three manners: a. Performance obligation adjustment. If a security is entered for rebidding and no new bids are received, then the incumbent Market Makers keep the assignment and are, at TSX’s discretion, allowed to adjust their Performance Obligations subject to the minimum service levels set out in Appendix A - Performance Guidelines for that security. 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: 1. At the time of the request, have performed successfully for a minimum of 3 months on the assignment, AND 2. At the time of the request, have less than two underperforming months on the assignment, AND 3. 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.
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