5113. Application of margin requirements — client account positions

Section 5113 describes the calculations for determining margin requirements for long and short positions in client accounts. It applies to Rules 5200 through 5900.

Client accounts - loan value of long positions

The loan value of a long position is generally calculated according to the formula:

1. [100% - applicable margin rate %] x positive market value of the security, or

2. by any alternative method specified in the IIROC requirements.

Client accounts - loan value of short positions

The loan value of a short client position is generally calculated according to the formula:

1. [100% + applicable margin rate %] x negative market value of security, or

2. by any alternative method specified in the IIROC requirements.

Net loan value and status of a client account

1. The positive and negative loan values in a client margin account must be totalled.

2. If the total loan value in a client account results in a net positive loan value, the client may have a debit cash balance no larger than the positive loan value amount for the account to be in good standing.

3. If the total loan value in a client account results in a net negative loan value, the cash balance in the margin account must be a credit equal to or larger than the net negative loan value for the account to be in good standing.

4. If a client does not bring its account into good standing by depositing the required amount of margin into its account, subsection 5111(2) applies.