5820. General account guarantee requirements

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    1. Subject to the requirements in sections 5821 and 5822, a Dealer Member may permit a client (the guarantor) to guarantee the accounts of another client provided:

      1. the Dealer Member informs the guarantor in writing of the initial contingent liability they will be assuming by signing the guarantee agreement,

      2. the Dealer Member discloses to the guarantor in writing that the suitability of transactions in the guaranteed client’s accounts will not be reviewed in relation to the guarantor,

      3. the guarantor signs an approved written guarantee agreement with the Dealer Member that:

        1. identifies the guarantor by name,

        2. identifies the guarantor accounts that are to be used to provide the guarantee,

        3. identifies the accounts of the other client that are subject to the guarantee,

        4. binds the guarantor, its successors, assigns and personal legal representatives, and

        5. contains the minimum terms set out in subsection 5825(1),    

      4. the guaranteed client consents in writing to the Dealer Member providing the guarantor, at least quarterly, with the guaranteed client’s account statements, and

      5. where the guarantor does not object, the guarantor is sent, at least quarterly, the guaranteed client’s account statements.

    2. Where the guaranteed client does not consent to providing account statements, the Dealer Member must notify the guarantor in writing of the guaranteed client’s refusal and that the guarantee agreement will not be accepted for margin reduction purposes.

    There is no history log for this rule.

    There is no history log for this rule.