5520. Margin requirements for underwriting commitments where a new issue letter has not been obtained

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    1. The minimum Dealer Member inventory margin requirement for a commitment in respect of a new issue of securities or a secondary issue of securities where a new issue letter has not been obtained is calculated in accordance with subsections 5520(2) through 5520(5).

    2. No out clauses in effect - Where the commitment is not subject to a market out clause or a disaster out clause (by the exclusion of these clauses from the related underwriting agreement), the margin required is:

      1. from the commitment date to 20 business days after settlement date, normal new issue margin,

      2. thereafter, normal margin.

    3. Disaster out clause in effect - Where the commitment is subject to a disaster out clause (by the inclusion of this clause in the related underwriting agreement), the margin required is:

      1. from the commitment date to the settlement date of the offering or the expiry date of the disaster out clause, whichever is earlier, 50% of normal new issue margin, and

      2. thereafter, the same as in subsection 5520(2).

    4. Market out clause in effect - Where the commitment is subject to a market out clause (by the inclusion of this clause in the related underwriting agreement), the margin required is:

      1. from the commitment date to the settlement date of the offering or the expiry date of the market out clause, whichever is earlier, 10% of normal new issue margin is required, and

      2. thereafter, the same as in subsection 5520(2).

    5. Disaster out clause and market out clause in effect - Where the commitment is subject to a disaster out clause and a market out clause (by the inclusion of these clauses in the related underwriting agreement), the margin required is:

      1. from the commitment date to the settlement date of the offering or the expiry date of the market out clause, whichever is earlier, 10% of normal new issue margin is required, and

      2. thereafter:

        1. where the disaster out clause is still in effect, the same as in subsection 5520(3), or

        2. where the disaster out clause is also no longer effect, the same as in subsection 5520(2).

    There is no history log for this rule.

    There is no history log for this rule.