A Dealer Member’s options trading agreement must define the rights and obligations of the Dealer Member and the client and, at a minimum, must include the following:
the time periods during which the Dealer Member accepts orders for execution,
the Dealer Member’s right to exercise discretion in accepting orders,
- the Dealer Member’s obligations when errors and omissions occur,
- the method for distributing exercise assignment notices,
- the Dealer Member’s deadlines for a client to submit an exercise notice,
- a notice that:
- the Dealer Member may set maximum limits on short positions,
- the Dealer Member may apply cash-only terms during the last 10 days before expiry, and
- IIROC may impose other rules affecting existing or subsequent transactions.
- the client’s obligation to instruct the Dealer Member to close positions before expiry,
- the client’s obligation to comply with IIROC requirements and any entity’s requirements through which the options is traded, cleared, or issued, including, without limitation, complying with position and exercise limits,
- the client’s positive acknowledgement of receiving the current options disclosure statement, and
- any other matter required by an options trading, clearing or issuing entity.