Glossary

Margin account – An investment account in which a line of credit is available for eligible clients who wish to buy securities without paying for them in full. The term "margin" refers to the portion of funds the investor must provide, which together with the line of credit loan, is used to make the purchase. The credit limit fluctuates daily based on the valuation of the securities held in your BMOB M O InvestorLine account. Margin trading is not allowed in registered accounts or on securities solely listed on the TSXT S X Venture Exchange.

Simple Trust – Interpretation for a simple trust is dependent on a clause in the trust document. If the trust is required to pay out the income earned to the beneficiaries on an annual basis, it is considered a simple trust.

Grantor Trust – This trust is organized for the benefit of the contributors. i.e. The contributors and beneficiaries are the same. Generally the income earned through this type of trust is flowing out to the beneficiaries and reported on their annual tax returns. A trust of this type may be established to facilitate income splitting, or to manage the affairs of someone who is ill or traveling out of the country.

Complex Trust – This is the easiest of the trusts to identify and to document.
In this classification the trust is considered as the beneficial owner. In this type of trust the earned income does not pass immediately to the beneficiaries but remains in the trust until some future date or event. A trust set-up for children until they reach a certain age would be an example of this type. Or, the income in the trust is used for some specific purpose such as building fund or scholarship fund. Other examples of this category are an estate and a mutual fund trust. If not Simple or Grantor, then for Qualified Intermediary purposes it is considered Complex.