Notice of Commission Approval – Proposed Amendments to IIROC Rules 100.2, 100.20, and 400.4 and Form 1 Relating to the Margin Requirements for Precious Metals
INVESTMENT INDUSTRY REGULATORY
ORGANIZATION OF CANADA (IIROC)
PROPOSED AMENDMENTS TO RULES
100.2, 100.20, AND 400.4 AND FORM 1
RELATING TO THE MARGIN REQUIREMENTS
FOR PRECIOUS METALS
NOTICE OF COMMISSION APPROVAL
The Ontario Securities Commission approved amendments to IIROC Rules 100.2, 100.20, 400.4 and Form 1 relating to the margin requirements for precious metals. In addition, the British Columbia Securities Commission did not object to, and the Alberta Securities Commission, the New Brunswick Securities Commission, the Nova Scotia Securities Commission, the Financial Services Regulation Division of the Department of Government Services for Newfoundland and Labrador and the Saskatchewan Financial Services Commission have approved the proposed amendments. In light of the risk level indicated by the analysis submitted by IIROC, the Autorité des marchés financiers approved the proposed amendments provided that IIROC submits, by August 29, 2009, an amendment to Rule 100.2(i)(i) to raise the margin rate for platinum certificates and bullion to 25%.
The objective of the proposed amendments is to (i) allow gold and silver bullion held by IIROC dealer member firms (Dealer Members) and their customers to be margined; (ii) revise the current margin rates to reflect the price volatility and liquidity risk associated with these metals; (iii) revise existing concentration requirements to reflect the risk to Dealer Members from exposure to previous metals; and (iv) revise insurance requirements to ensure that gold and silver bullion are included in the base on which insurance is calculated. A copy and description of the proposed amendments were originally published as Investment Dealers Association of Canada’s amendments on February 29, 2008, at (2008) 31 OSCB 2737. No public comments were received. Some non-material changes were made to the proposed amendments once they were originally published. A black-lined version highlighting the changes from the version published on February 29, 2008 and a clean version is included in Chapter 13 of this OSC Bulletin.