On 26 March 2026, CIRO issued guidance on fully paid securities lending.
- CIRO published guidance re Dealer Members’ practice of borrowing fully paid, excess margin securities from retail clients; in compliance with CIRO Rule 4600 Part B.2.
- Follows Feb. 15, 2026, CIRO proposed fully paid securities lending guidance.
Fully Paid Securities Guidance
- Part B.2. of Rule 4600 does not apply to institutional client securities lending, including institutional client fully paid lending; it is governed under traditional lending Rule 4600.
- Institutional clients choosing to be treated as a retail client re their fully paid lending arrangement with the dealer will be subject to Part B.2.; and this guidance will apply.
- Securities lending is common market practice in CAN; self-clearing operations have lending desks that earn revenue by lending securities to institutions, hedge funds.
- Clients earn passive income on the loaned assets; facilitate trading strategies like short selling; help meet collateral requirements; fulfill settlement obligations for efficiency.
