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CA-5.1.3

Convertible debt securities must be treated as equities where:

(a) The first date at which the conversion may take place is less than three months ahead, or the next such date (where the first date has passed) is less than a year ahead; and
(b) The convertible is trading at a premium of less than 10%, where the premium is defined as the current marked-to-market value of the convertible less the marked-to-market value of the underlying equity, expressed as a percentage of the latter.
In other instances, convertibles should be treated as either equity or debt securities, based reasonably on their market behaviour.
October 07