PART B.5 - MARGIN REQUIREMENTS

4366. No written custodial agreement

Or jump to a Series:

    1. If a Dealer Member does not have a written custodial agreement with a custodian, and that entity would otherwise qualify as an acceptable securities location, it must provide margin on the security positions held in custody at that custodian in accordance with subsections 4366(2) and 4366(3).

    2. Dealer Member has no set-off risk with the custodian

      1. If the Dealer Member has no set-off risk with the custodian, in determining its early warning excess and early warning reserve, the Dealer Member must deduct as a margin requirement 10% of the market value of the securities held in custody at the custodian.

    3. Dealer Member has set-off risk with the custodian

      1. If the Dealer Member has set‑off risk with the custodian, in determining:

        1. its risk adjusted capital, the Dealer Member must deduct as a margin requirement the lesser of:

          1. 100% of the set‑off risk exposure, and

          2. 100% of the market value of the securities held in custody

          3. and

        2. its early warning excess and early warning reserve, the Dealer Member must deduct as a margin requirement the lesser of:

          1. 10% of the market value of securities held in custody at the custodian, and

          2. 100% of the market value of securities held in custody at the custodian less amount required in sub‑clause 4366(3)(i)(a).

    There is no history log for this rule.