The Investment Industry Regulatory Organization of Canada has announced timelines for the implementation of the new methodology for margining equity securities.

The new methodology will apply to securities listed (other than bonds and debentures) on any recognized exchange in Canada or the U.S. margin rates for these securities will normally be made available to firms via an electronic margin rate file after the end of each calendar quarter.

Prior to the implementation of the second phase of the project, which is scheduled for July 2009, there will be a preparation period and an official test period for dealers and their service providers to prepare for the change.

The preparation period is scheduled to run from June to December of this year. The purpose of this period is to allow firms time to make the necessary changes to their systems so that they will be able to use the margin rates in the margin rate file. The first margin rate file will be made available during the week of June 23. The second file will be made available three weeks after the last Friday in the third quarter.

The official test period will run from January to June 2009. It will allow firms to test, and determine the potential impact of, the new margin rates on their operations and business, and communicate any concerns to the IIROC. Based on the concerns raised, if any, IIROC will decide whether to proceed with making the Phase 2 implementation effective in July 2009 or extend the test period.