The Investment Industry Regulatory Organization of Canada is proposing amendments to its rules that are designed to simplify a new methodology for margining equity securities.

The regulator is seeking comment on rule changes that it says “would simplify a number of processes for IIROC staff and dealer members regarding the implementation and ongoing support of the Equity Margin Project’s new methodology for margining equity securities.”

Among other things, the proposed amendments would:

> remove the 20% customer margin rate category for both long and short customer positions;

> remove the 150% margin rate category for short positions;

> allow the market price per share based margin rate methodology to be used where there is no published long or short margin rate for a listed security, and for specific unlisted securities that are eligible for margin; and

> harmonize the market price per share based margin rate categories with the new methodology’s margin rate categories.

“It is believed that the proposed amendments will have no impact in terms of capital market structure, competition generally, cost of compliance and conformity with other rules. The proposed amendments do not permit unfair discrimination among customers, issuers, brokers, dealers, members or others. It does not impose any burden on competition that is not necessary or appropriate in furtherance of the above purposes,” the request for comment says.

Comments are sought on the proposed amendments by June 30.

http://www.iiroc.ca/English/Pages/home.aspx