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Canada

MARGIN REQUIREMENTS FOR CRYPTOCURRENCY FUTURE CONTRACTS

MARGIN REQUIREMENTS FOR CRYPTOCURRENCY FUTURE CONTRACTS

 

  • With the launch of trading of cryptocurrency on certain futures exchange in December 2017, there is a need to clarify the minimum margin requirements for these future contracts for Dealer Member Inventory and client positions.
  • As per Dealer Member Rule 100:8(f); the Investment Industry Regulatory Organisation of Canada (IIROC) may prescribe greater or lesser margin requirements than those prescribed or referred to in Rule 100.8 (Commodity Futures Contracts and Futures Contract options) with respect to any particular or kind of person or account.
  • The IIROC prescribes greater margin requirements for cryptocurrency future contracts that trade on commodity futures exchanges than the margin requirements prescribed or referred to in Rule 100.8.
  • For such exchange-traded cryptocurrency futures contract positions of Dealer Members and clients, a Dealer Member must mark to market and margin them daily at the greatest of:
    • 50% of the market value of the contracts;
    • The margin required by the futures exchange on which the contracts are entered into;
    • The margin required by the futures exchanges clearing corporation;
    • The margin required by the Dealer Member’s clearing broker.

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Law Graduate from Bangalore, India. Currently involved in research of global crypto regulations and compliance.

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