On June 24, 2020, the Board of Directors (the Board) of the Investment Industry Regulatory Organization of Canada (IIROC) approved the publication for comment of proposed amendments to Dealer Member Rule (DMR) subsections 100.2(j) and 100.2(k), and IIROC Rule section 5442 that would allow a grace period in applying the swap counterparty margin requirements (collectively, Proposed Amendments).

Following the publication for comments by the Canadian Securities Administrators (CSA) of proposed National Instrument 93-101 – Derivatives: Business Conduct (NI 93-101) and National Instrument 93-102 – Derivatives: Registration (NI 93-102), IIROC performed a complete review of all its Dealer Member related rules (IIROC Rules) to determine:

IIROC is proposing amendments to Dealer Member Rule (DMR) 100.2 and IIROC Rule 5400 that would allow margining of structured products using either a fixed rate or an alternative component margining methodology (Proposed Amendments).

The main purpose of the Proposed Amendments is to formally recognize a margin methodology for structured products as the current DMR and IIROC Rules do not specifically address margin requirements for these products.

The Proposed Amendments would:

IIROC is amending its rules in the core areas of account appropriateness, know-your-client (KYC), suitability, conflicts of interest, and relationship disclosure information (RDI) and introducing new rules in the core areas of product due diligence and know-your-product (KYP) (collectively, the Amendments).