Credit policy

For your first trade (that is, when you have zero or no “Total Market Value” in your account) to be accepted you must have sufficient cash in your CIBC Investor's Edge account to cover the entire purchase, including commissions. If you have sufficient cash, select either the “Pay From: Investment Account” or “Pay From: Registered Account” settlement option.

If you have insufficient cash in your CIBC Investor's Edge account, you must arrange for an amount equal to or more than the total purchase cost to be transferred from your bank account to your CIBC Investor's Edge account. The cash transfer must increase your CIBC Investor's Edge account balance to meet or exceed the total purchase cost of your order.

If you don’t have a bank account linked to your CIBC Investor's Edge account, you can instead make a “Deposit Acceleration” (or InterBranch Payment for US funds) to cover the entire purchase cost. Contact your CIBC branch to debit your bank account for the applicable amount, and request that the debited funds be forwarded by Deposit Acceleration (or InterBranch Payment for US funds) to your CIBC Investor's Edge account.

Your CIBC branch will give you an Electronic Journal (EJ) Number for the transaction.

After the deposit has been submitted, contact CIBC Investor's Edge to place a note with the details of the EJ Number in your account and assist you with your trade.

The First Trade Rule applies for all currency components of the account.

For cash accounts, you must make your payment for trades in full by the trade settlement date or by an earlier date as specified by us. All online orders must have sufficient funds for payment available at the time order is placed. If you fail to pay in a timely manner, you may have a “Cash up Front” restriction placed on your account. Debit balances are charged interest based on the rates posted on our website.

For your trade to be accepted electronically, when selecting the “Pay From: Investment Account” or “Pay From: Registered Account” settlement option, there must be sufficient cash or cash equivalents in your CIBC Investor's Edge account to cover the entire purchase (including commissions). “Cash equivalents” are defined as a pending mutual fund sale, a pending security sale “at market” or a previously filled security sale.

Note: You are subject to any redemption or DSC fees charged on the sale of non-CIBC mutual funds, if applicable.

If cash in your Non-Registered Plan account is available only when all currencies are pooled, the buy order may be accepted. CIBC Investor's Edge may cover the debit by a currency conversion at our discretion. For Registered Plan accounts, you need to have sufficient cash in the same currency of your account where the trade settled. Amounts in other currencies won’t be considered available as part of purchase calculations for registered plan accounts. You can place instructions for the conversion of funds online or by contacting us.

Note: You can always choose to have a trade settle in either Canadian or US funds.

If the value of your purchase including commissions doesn’t satisfy the Cash Account Equity Rule, you must transfer in cash from your bank account before placing the trade. If you’re transferring in funds from a bank account at another institution, the hold period must pass before you place your order.

Before placing your trade, submit a cash transfer. You can do this online or by contacting us. To do it online, go to “Transfer Cash” under “Transfers and Exchange”. Remember to check the “Order Status” tab to verify the status of your request. For Registered Plan accounts, cash transfers into the account will be considered contributions and individual contribution limits will apply.

Free-riding or flipping occurs when a client doesn’t pay for a security they’ve purchased before selling the same security. When a client free-rides, they’re trading on the firm's capital — a practice that is strictly prohibited.

Our credit department monitors free-riding and keeps record of this in the account file. If free-riding is found, we may take action including (but not limited to) suspending your trading privileges or requiring “Cash Up Front” for every trade on your account.

In a margin account, cash or excess margin must be available to cover the payment requirement of an order.

When selecting the “Pay From: Investment Account” settlement option, you must have sufficient cash or “Margin Excess” to cover the payment required for your purchase at the time of trade. “Margin Excess” is defined as the difference between the loan value granted on securities held in your account and the total amount currently being borrowed.

Keep in mind the minimum equity requirements:

• $2,000 CA for all margin accounts
• $10,000 CA to open spread strategies in margin accounts
• $25,000 CA to open short option positions for naked writing

For the purpose of this rule, “equity” is defined as the total market value of cash and securities in your margin account. Securities that are held as safekeeping, are non-transferable, or aren’t priced by public exchange or market may be excluded from determining “equity.”

If your CIBC Investor's Edge account has insufficient Margin Excess available at the time of trade, you can generate the necessary Margin Excess by one of the following two methods:

1. You may sell a security in order to create sufficient Margin Excess. The sale of the security will increase the Margin Excess only by the amount of margin required to hold that security position and only when the sale has been filled.
2. You may initiate a same-day cash transfer from your bank account. A same-day cash transfer will increase the Margin Excess in your account by the full amount of the cash transfer if there is no outstanding margin requirement. Before placing your trade, submit a cash transfer. You can do this online or by contacting us. To do it online, go to “Transfer Cash” under “Transfers and Exchange”. Remember to check the “Order Status” tab to verify the status of your request.

Concentrated accounts are those that have a very large margined holding in one security with little or no diversification in other holdings or types of securities. Loan value on a per security basis may be reduced without notice if the account is “concentrated.”

Restrictions may be set on individual issues, by security type and/or exchange. Limits are generally linked to the historical volatility of the various security types and exchanges. Generally, a margin account is “concentrated” when the loan value of one security or sector represents a significant percentage (about 25% or more) of the total loan value of the account. Concentration may be determined at our discretion without notice. You must address any margin call resulting from a concentrated position in a timely manner.

CIBC Investor's Edge retains absolute discretion to increase your margin requirements at any time or reason.

Retirement Income Funds (RIF) accounts are subject to Canada Revenue Agency guidelines and regulations. For a RIF account, cash or near-cash securities must be available for regular RIF payments and/or fees charged in your CIBC Investor's Edge account.

As a CIBC Investor’s Edge client, you’re responsible for ensuring that the investments in your registered plans are, and remain, eligible investments. The investment has to be a “qualified investment” and not a “prohibited investment” according to applicable tax legislation and guidance.

You’re also responsible for any taxes with respect to non-qualified or prohibited investments in your registered plan account.