IDA Regulation 100.2(F)(I) Margin Treatment of CNQ Exchange Traded Securities - Withdrawal of Proposed Rule Amendment

INVESTMENT DEALERS ASSOCIATION OF CANADA

REGULATION 100.2(F)(I) - MARGIN TREATMENT OF

CNQ EXCHANGE TRADED SECURITIES

WITHDRAWAL OF PROPOSED RULE AMENDMENT

I Overview

On June 25, 2004, the Ontario Securities Commission published for comment a proposed rule amendment that would specifically deny margin eligibility to positions in Canadian Trading and Quotation System Inc. (CNQ) exchange listed securities.

II Withdrawal

The Association has informed the Canadian Securities Administrators that the Association has withdrawn the proposed rule amendment. In its place, the Association has submitted, as part of a set of proposals seeking to adopt a new methodology for the margining of equity securities, a proposed rule amendment that would deny margin eligibility to positions in securities listed on markets or market tiers with initial or ongoing financial listing requirements that do not include adequate minimum pre-tax profit, net tangible asset and working capital requirements, as determined by the Association from time to time.

Questions may be referred to:

Richard J. Corner

Vice President, Regulatory Policy

Investment Dealers Association of Canada

(416) 943-6908