With the launch of cryptocurrency futures on the major U.S. derivatives exchanges, the Investment Industry Regulatory Organization of Canada (IIROC) is imposing higher margin requirements for trades in crypto futures.
IIROC is “prescribing greater margin requirements for cryptocurrency futures contracts that trade on commodity futures exchanges,” the self-regulatory organization says in a notice published on Monday.
For exchange-traded cryptocurrency futures contract positions of both dealers and clients, dealers must mark positions to market, and margin them daily at least 50% of market value, or the margin required by the exchange, the exchange’s clearing firm, or the dealer’s clearing broker; whichever is highest.
According to the notice, for exchange-traded cryptocurrency futures contract positions of dealers and clients, a dealer must mark to market and margin them daily at the greatest of:
> 50% of 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 exchange’s clearing corporation
> the margin required by the Dealer Member’s clearing broker.
The new guidance takes effect immediately.
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