PART A.1 – FIXED INCOME TRANSACTIONS

4805. Fixed income delivery

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    1. In section 4805 “regular delivery” is defined as:

      1. Government of Canada

        1. The same day as the transaction date for Government of Canada Treasury Bills.

        2. The second business day after the transaction date for Government of Canada Bonds and Government of Canada Guaranteed Bonds (except Treasury Bills) having an unexpired term to maturity of three years or less (or to the earliest call date where a transaction is completed at a premium). Any accrued interest must be stopped on the second business day after the transaction date.

        3. The second business day after the transaction date for Government of Canada Bonds and Government of Canada Guaranteed Bonds having an unexpired term to maturity of longer than three years (where such a bond is traded at a premium the earliest call date shall be treated as the maturity date). Any accrued interest must be stopped on the second business day after the transaction date.

      2. Province of Canada

        1. The second business day after the transaction date for all provincial bonds or debentures. Any accrued interest must be stopped on the second business day after the transaction date.

      3. Other Bonds and Debentures

        1. The second business day after the transaction date for all municipal, corporation and other bonds or debentures (other than Government of Canada and Province of Canada treasury bills, bonds or debentures), and other certificates of indebtedness including mortgage-backed securities. Any accrued interest must be stopped on the second business day after the transaction date.

    2. All trades are to be considered for regular delivery, unless otherwise agreed to in writing by all of the parties to a transaction at the time of the transaction.

    3. For a deal involving the sale or purchase of more than one maturity, each maturity must be treated as a separate transaction. No contingent (all or none) dealings are permitted.

    4. New issues delivery

      1. The regular delivery requirements are not intended to interfere in any way with the common practice of transactions between Dealer Members in new issues during the period of primary distribution on an "accrued interest to delivery" basis. However, the regular delivery requirements will come into effect on the appropriate number of business days prior to the new issue being first available for physical delivery.

      2. Where a new issue delivery is made against payment outside of the points fixed for the initial syndicate delivery of the issue, additional accrued interest must be charged from the delivery date at the initial syndicate delivery point of the new issue, according to the length of time normally required for delivery to the locality in which the delivery is made.

      3. For a mortgage-backed security transaction made during the period from the second business day before month-end to the first business day on or before the twelfth day of the following month, inclusive, delivery must take place on or after the fifteenth day of the month.

    5. Location

      1. For any transaction between Dealer Members in the same municipality where physical delivery is to be made, the seller must complete the delivery before 4:30 p.m. on a business day.

      2. For any transaction between Dealer Members in different municipalities, the seller must complete the delivery on the buyer’s terms, that is the delivery is to be made by the seller free of banking or shipping charges to the buyer. Where bank drafts are drawn to arrive at their destination on a day that is not a business day, the seller is entitled to have charges paid up to the next business day after the expected arrival of the bank drafts.

    6. Good delivery

      1. Securities traded by Dealer Members must be good delivery securities. Therefore, they must have the necessary endorsements, guarantees or both, and meet all legal and regulatory requirements so that their titles can be transferred by delivery to the buyer on settlement date. The seller must obtain them and include them with the delivery.

      2. Good delivery securities may consist of bearer bonds or debentures or registered bonds or debentures.

      3. For good delivery, securities that can be traded as actual certificates or as certificates of deposit, delivery must be made in the form of actual certificates, unless stated otherwise at the time of the transaction.

      4. For good delivery, the bonds or debentures are to be of a maximum denomination of $100,000 par value, unless agreed to otherwise by the buyer.

      5. For good delivery, if a power of attorney is necessary for the certificates, one power of attorney for each certificate is required, unless the buyer has agreed otherwise to accept an amalgamated power of attorney.

      6. For good delivery, if definitive certificates are not available interim certificates may be used. However, once definitive certificates are available interim certificates may not be used, unless the Dealer Members agree otherwise.

      7. Good delivery securities may consist of the following, provided that is it acceptable to the transfer agent:

        1. bonds or debentures registered in the name of an individual, properly endorsed and with endorsement guaranteed by a Dealer Member in good standing of IIROC or an acceptable exchange in Canada or the United States, or by a chartered bank or qualified Canadian trust company,

        2. bonds or debentures registered in the name of a Dealer Member or nominee of a Dealer Member and properly endorsed,

        3. bonds or debentures registered in the name of a member of an acceptable exchange in Canada or the United States and properly endorsed,

        4. bonds or debentures registered in the name of a chartered bank or qualified Canadian trust company or the nominee of a chartered bank or qualified trust company and properly endorsed.

    7. Not good delivery

      1. A mutilated or torn certificate or coupon unless acceptable to the receiving Dealer Member.

      2. A certificate registered in the name of a firm or corporation that has made an assignment for the benefit of creditors or has been declared bankrupt.

      3. A certificate signed by a trustee or administrator unless accompanied by sufficient evidence of authority to sign.

      4. A certificate with documents attached other than a registered bond of an issue available in registered form only, with completed power of attorney to transfer attached. (One power of attorney for each certificate or an amalgamated power of attorney if acceptable to receiving broker or dealer).

      5. A certificate which has been altered or erased (other than by the transfer agent) whether or not such alteration or erasure has been guaranteed.

      6. A certificate on which the assignment or substitute attorney has been altered or erased.

      7. A certificate with the next maturing coupon or subsequent coupons detached unless where so traded or where a certificate cheque (if for $1,000 or more) payable to the receiving Dealer Member, dated no later than the date of delivery and for the amount of the coupon missing, is attached to the certificate in question.

      8. A bond or debenture, registered as to principal only, which after being transferred to bearer, does not bear the stamp and signature of the trustee.

      9. A registered bond or debenture unless it bears a certificate that provincial tax has been paid where applicable.

      10. A certificate that has a stop transfer placed against it, the stop having been placed prior to delivery being made to the receiving dealer or broker.

    8. Prior to notice of call

      1. Sales or purchases of securities prior to notice of call in part but not in full and undelivered on date of such notice, must be completed on the basis of the original transaction. Date of notice is the date of the notice of call irrespective of the date of publication of such notice. Called securities do not constitute good delivery unless the transaction is so designated at its inception.

      2. Sales or purchases of securities prior to notice of call in full and undelivered at time of such notice must be completed on the terms of the original transaction.

    There is no history log for this rule.

    There is no history log for this rule.