PART B.1 - GENERAL CUSTODY REQUIREMENTS

4340. Introduction

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    1. A Dealer Member takes on certain operational risks when it has custody of securities. These risks arise in connection with the location where and by whom the securities are held and whether a Dealer Member has adequate internal controls to deal with these risks. Part B of Rule 4300 prescribes IIROC requirements for managing the risks related to securities custody. As these risks are quantifiable, they are treated as margin charges when calculating Dealer Member risk adjusted capital. This Part B of Rule 4300, in conjunction with Form 1, prescribes these charges.

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