Request for Comment – Republication of Proposed Amendments to Dealer Member Rules and Form 1 Regarding the Securities Concentration Test and Designated Rating Organizations – Investment Industry Regulatory Organization of Canada (IIROC)

Market Regulation Document Type
IIROC rule review

IIROC is republishing for public comment proposed amendments to its Dealer Member Rules (DMRs) and Form 1 regarding the securities concentration test and designated rating organizations (Proposed Amendments). The Proposed Amendments address issues raised in the public comment letters received in response to IIROC Notice 18-0153, published on August 9, 2018 (2018 Proposed Amendments). The Proposed Amendments retain the same fundamental framework for introducing debt securities with a normal margin rate of 10% or less (debt securities margined at <=10%) into Schedule 9 relating to the concentration of securities, which is based on a designated rating organization (DRO) risk-weighting methodology. The primary differences between the Proposed Amendments and the 2018 Proposed Amendments relate to changes that recalibrate the DRO risk-weighting adjustment factors and other changes that should reduce operational complexity and related costs.

The Proposed Amendments introduce debt securities margined at <=10% into the existing securities concentration test. The Proposed Amendments also update the use of credit ratings, and references to credit rating agencies, in the DMRs and Form 1. The primary objective of the Proposed Amendments is to prevent undue concentrations in certain debt securities margined at <=10%.

A copy of the IIROC Notice, including the text of the Proposed Amendments, is published on our website at The comment period ends on September 30, 2019.