FUTURES CONTRACTS AND FUTURES CONTRACT OPTIONS ACCOUNTS

3258. Futures contract and futures contract option trading agreement

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    1. A Dealer Member’s futures contract and futures contract option trading agreement must define the rights and obligations of the Dealer Member and the client and, at a minimum, must include the following:

      1. the time periods during which the Dealer Member accepts orders for execution,

      2. the Dealer Member’s right to exercise discretion in accepting orders,
      3. the Dealer Member’s obligations when errors or omissions occur,
      4. the method for distributing exercise assignment notices,
      5. the Dealer Member’s deadlines for a client to submit an exercise notice,
      6. the Dealer Member’s right to impose trading limits or closeout positions under specified conditions,
      7. for futures contract options, the method for distributing exercise assignment notices and the client’s obligation to instruct the Dealer Member to close out contracts before the expiry date,
      8. the conditions under which the Dealer Member may apply the client’s funds, securities or other property in the account or any other accounts of the client to satisfy outstanding debts or margin calls,
      9. the extent of the Dealer Member’s right to use free credit balances in the client’s account for its own business or to cover debits in the same or other accounts,
      10. the requirement for the Dealer Member to obtain client consent before the Dealer Member may take the other side to the client’s transaction, and whether the client provides such consent,
      11. the Dealer Member’s right to raise money on and pledge assets held in the client’s account,
      12. the extent of the Dealer Member’s right to deal with securities and other assets in the client’s account and to hold them as collateral against the client’s debts,
      13. the Dealer Member’s right to provide information to regulators regarding reporting and position limits,
      14. the client’s obligations to comply with reporting, position limit and exercise limit requirements that the relevant futures exchange or its clearing house establishes,
      15. a statement that the Dealer Member requires a client to maintain a minimum margin that is the greater of:
        1. the amount the futures exchange or clearing house prescribes,
        2. IIROC’s requirements, or
        3. the Dealer Member’s requirements,
      16. the client’s obligation to maintain adequate margin and security and to pay any debts to the Dealer Member,
      17. a statement that the Dealer Member may commingle and use the client’s margin funds or property in its own business,
      18. the client’s obligations to pay commission, if any,
      19. the client’s obligation to pay interest on debit balances in the account, if any,
      20. whether any discretionary authority is given to the Dealer Member, and if so, the discretionary authority must be clearly explained and specifically confirmed by the client, unless such discretionary authority is provided in another document.  The authority must be consistent with the requirements contained within Part G of Rule 3200, 
      21. the client’s positive acknowledgement that they have received the futures disclosure statement, and
      22. other than for a hedging account, a risk disclosure limit for futures trading indicating the maximum amount of cumulative losses the client can sustain which can be:
        1. on a life time basis, or
        2. on an annual basis, provided that it is updated annually.

    There is no history log for this rule.

    There is no history log for this rule.