OFFSETS INVOLVING CONVERTIBLE SECURITIES

5644. Offset relating to a pending amalgamation, acquisition, spin-off or other securities related reorganization transaction

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    1. Where a Dealer Member or a client holds a long position in Oldco securities and short position in Newco securities and equivalent quantities of both positions are held and the pending reorganization that resulted in the creation of the Newco securities has received approval to proceed, the two positions may be offset and the minimum margin required for both positions may be computed as the excess of the combined market value of the Oldco securities over the combined market value of the Newco securities, if any.

    2. For the purposes of subsection 5644(1), “approval to proceed” means that:

      1. all legal requirements to proceed with the reorganization have been met,

      2. all regulatory, competition bureau and court approvals to proceed with the reorganization have been received, and

      3. the Oldco securities will be cancelled and replaced by an equivalent number of Newco securities within 20 business days.

    5645. - 5649.  Reserved.

    There is no history log for this rule.

    There is no history log for this rule.