Margin Account - diversified portfolio

Margin account - diversified portfolio

Diversified Portfolio
You can usually hold a diversified portfolio of investments from GICs and money market instruments to stocks and mutual funds through a Margin Account. A Margin Account works in conjunction with a Cash Account for your non-registered investment needs.

When you qualify for a Margin Account, you can take advantage of all the features of a Cash Account and it may be possible to obtain a portion of your purchase price for eligible investments.

A Margin Account can also allow you to free up cash that would otherwise be used for your investments; the margin eligible securities in your account would be used as collateral for the loan. Provided you have excess margin in your account, you can quickly and easily transfer cash to your Bank account. The outstanding loan amount is based on the previous day's closing price of your eligible securities. The difference between your present loan and the original loan amount represents your Margin Call or Margin Excess position.

Interest on U.S. dollar debit balances is usually charged at Bank U.S. Prime Rate plus 1%.

Here are examples of some of the eligible securities and the applicable margin:

SECURITY	MARGIN REQUIRED
Stocks * Canadian Option Eligible Option Eligible S&P 500 Index US Option Eligible $5.00 and over $3.00 to $4.99	40% 40% 50% 50% 75%
Rights and Warrants $5.00 and over $3.00 to $4.99	50% 75%
Debt Corporate Bonds and Debentures (not convertible or in default) Municipal Bonds GICs Parastatal Bonds Corporate Paper U.S. Bonds Treasury Bills	20% 20% 20% 10% 10% 7% 3%
Mutual Funds	50%
*The above margin requirements are a general guideline and are subject to change without prior notice. Equities trading on NASDAQ must be above $3.00 and approved by the Federal Reserve Board to qualify for margin.