OFFSETS INVOLVING CAPITAL SHARES

5654. Offset involving short capital share, short split share preferred share and long underlying common share positions

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

      1. lesser of:

        1. the combined conversion loss, if any, and 

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

      2. and

      3. 40% of the normal margin required on the underlying common shares.

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