OFFSETS INVOLVING CAPITAL SHARES

5651. Offset involving long capital share and short underlying common share positions

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    1. Where a Dealer Member or a client holds a long capital share position and a short underlying common share position and equivalent quantities of both positions are held, the two positions may be offset and the minimum margin required for both positions may be computed as the sum of:

      1. lesser of:

        1. the sum of:

          1. the capital share conversion loss, if any, and

          2. the normal margin required on the equivalent quantity of split share preferred shares,

        2. and

        3. the normal margin required on the underlying common shares,

      2. and

      3. if the capital shares cannot be delivered to the split share company for retraction directly into the underlying security at the holder’s option, 20% of the margin otherwise required on the underlying common shares.

    There is no history log for this rule.

    There is no history log for this rule.