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  • CL-1.2 CL-1.2 Stock Lending Rules

    • CL-1.2.1

      An investment firm licensee must not undertake or otherwise engage in stock lending activity with or for a client unless the investment firm licensee has obtained the consent of the CBB and the client.

      Amended: January 2007

    • CL-1.2.2

      If a safe custody investment belonging to a retail client is used for stock lending activity, the investment firm licensee must ensure that:

      (a) Relevant collateral is provided by the borrower in favour of the client;
      (b) The current realisable value of the safe custody financial instrument and of the relevant collateral is monitored daily; and
      (c) The investment firm licensee provides relevant collateral to make up the difference where the current realisable value of the collateral falls below that of the safe custody financial instrument, unless otherwise agreed in writing by the client.
      Amended: January 2007

    • CL-1.2.3

      If safe custody financial instruments of more than one client are held together, none of those safe custody financial instruments may be used for a stock lending activity unless:

      (a) All of those clients have consented to their safe custody financial instrument being used for that activity; or
      (b) The investment firm licensee has adequate systems and procedures in place to ensure that only safe custody financial instruments belonging to clients who have given their consent are used for stock lending activity.
      Amended: January 2007