Proposed NI 51-103

December 11, 2012

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Proposed NI 51-103

Letter Summary:

Dealer Members should be given the choice of using the portfolio-based methodology for accredited investors, subject to the caveats set out in the responses below. We believe that Dealer Members would feel compelled for competitive reasons to utilize such methodology, and thus it is important that the safeguards described below be employed, particularly those described in response (iv) below relating to a Dealer Member’s exposure to any one particular security or sector.

Overview of the Council’s Comments:

As a general comment, we note that to the extent a new margining methodology could result in excessive leverage, the negative consequences of a severe market downturn on retail clients cannot be overstated. The CAC wishes to respond to the questions in Appendix 1 to the Concept Paper that relate to the use of portfolio margining for determining margin lending limits for certain sophisticated clients as set out below.