5220. Commercial and corporate bonds, debentures, notes and other securities not in default

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    1. The minimum Dealer Member inventory margin and client margin requirements for commercial and corporate bonds, debentures, notes and other securities not in default are as follows:

      Term to maturity

      Minimum margin required as a percentage of market value

      Category (i)

      Commercial and corporate bonds, debentures and notes and non‑negotiable and non‑transferable trust and mortgage loan company obligations registered in the Dealer Member’s name; and acceptable commercial, corporate and finance company notes and readily negotiable and transferable trust and mortgage loan company obligations.

      Category (ii)

      Canadian and foreign category (i) issues and obligations with a market value of 50% or less of par value and with a low current credit rating

      Within 1 year

      3.00%
      x
      number of
      days to maturity
      365

      50.00%

      Over 1 to 3 years

      6.00%

      Over 3 to 7 years

      7.00%

      Over 7 to 11 years

      10.00%

      Over 11 years

    2. In subsection 5220(1) category (i), acceptable commercial, corporate and finance company notes means notes issued by a company that comply with the following requirements:

      1. In the case of a note of a Canadian incorporated issuer:

        1. the issuer must have a net worth of at least $10,000,000,

        2. the note must be guaranteed by another company with a net worth of at least $10,000,000, or

        3. the issuer must have a binding agreement with another company with net worth of at least $25,000,000 to pay the issuer or a noteholders’ trustee any note indebtedness outstanding.

      2. In the case of a note of a foreign incorporated issuer:

        1. the issuer must have a net worth of at least $25,000,000, or

        2. the note must be guaranteed by a foreign incorporated company with a net worth of at least $25,000,000.

    There is no history log for this rule.

    There is no history log for this rule.