Canada – IIROC Securities Concentration

Canada – IIROC Securities Concentration

On 29 August 2019, IIROC republished proposed amendments, comments by 30 September 2019.


  • IIROC proposed amendments to its dealer member rules (DMRs), and to Form 1,
    regarding securities concentration test and designated rating organizations (DRO).
  • Bring debt security margined at <=10% into existing securities concentration test.
  • And also update the use of credit ratings, and references to credit rating agencies.
  • Followed withdrawal of original proposals re securities concentration.

Proposed Amendments

  • Introduce definition designated rating organization (DRO) into DMRs and Form 1.
  • Add a minimum DRO current credit rating requirement for Canadian bank paper
    so as to qualify as eligible investment, for client free credit segregation purposes.
  • Separate test for debt securities margined at <=10% v. current Sch 9 positions.
  • Application of a credit rating risk-weighting methodology to scale debt securities
    margined at <=10% into the existing securities concentration test framework.
  • Re impact, dealer members will need to ensure their compliance systems provide
    satisfactory credit rating agency monitoring so as to meet the new requirements.