IEM Prospectus: 2022 QUEBEC GENERAL ELECTION SEAT SHARE MARKET
On Tuesday, September 6th at 11:30CT, the Iowa Electronic Market (IEM) will open trading in seat-share contracts based on the 2022 Quebec General Election. This document describes those contracts and should be viewed as a supplement to the IEM Trader’s Manual. Except as specified in this prospectus, trading rules for this market are the same as those specified in the Trader’s Manual for the Iowa Electronic Market.
Payoffs in the 2022 Quebec General Election Seat-Share Market will be determined by the number of seats won by parties in the 2022 Quebec General Election. Contracts will be associated with the political parties. For instance, contracts for a party that wins 21 seats will be worth 21.0 cents.
Contracts
Initially the market will consist of six contracts representing five named political parties and an Other option for all candidates not affiliated with one of the named parties. Between the opening of the market and the election, the IEM reserves the right to split contracts into (possibly several) named parties as discussed below.
At market open, the financial contracts traded in this market are:
| Code | Contract Description |
| CAQ22_SS | $0.01 times the number of seats won by the Coalition Avenir Quebec party |
| PLQ22_SS | $0.01 times the number of seats won by the Parti Liberal du Quebec party |
| PCQ22_SS | $0.01 times the number of seats won by the Parti Conservateur du Quebec party |
| QS22_SS | $0.01 times the number of seats won by the Quebec Solidaire party |
| PQ22_SS | $0.01 times the number of seats won by the Parti Quebec party |
| OTH22_SS | $0.01 times the number of seats won by all other parties |
Liquidation formulas can be viewed while you are logged into the IEM trading system by clicking on the market name, QUEB22_SS, at the upper right-hand corner of the market window.
Contract Spin-Offs
TThe IEM reserves the right to spin off contracts associated with named parties. When new party-specific contracts are created, they will be spun-off from the OTH22_SS contract.
For example, suppose that the OTH22_SS contract is split into (1) a named party designated by NAMED22_22 where NAMED represents the new, named political party and (2) a new OTH22_SS, which represents remaining unnamed political parties. The new contract NAMED22_SS will liquidate at $0.01 times the number of seats won by the NAMED party. The OTH22_22 will liquidate $0.01 times the number of seats won by all other parties (not including the NAMED party).
No holder of the pre-spinoff contracts will be adversely affected by the spin-off. Traders will receive the same number of each of the new contracts as they held in the original contract, and the sum of the liquidation values of the new contracts will equal the liquidation value of the original contract. Outstanding bids and asks for the contract which is to be split will be canceled just prior to the spin-off.
Contract spin-offs will be announced in the IEM News Screen at least two days in advance of the spin-off.
Determination of Liquidation Values
The election data posted on the Elections Quebec official website at 5pm CST on Wednesday, October 5, 2022 or as soon after as available, will be the official source used to determine payoffs. In the event that the results are not reported at that website by midnight, Wednesday, October 5, 2022, the official website of the CBC (www.cbc.ca) will become the official source. In the event that the election is delayed or postponed, liquidation will take place in a timely fashion after the close of polling sites.
The judgment of the IEM Governors and Directors will be final in resolving questions of interpretation and typographical or clerical errors. Market Info at the upper left-hand corner of the market window.
The judgment of the IEM Governors and Directors will be final in resolving questions of typographical or clerical errors and ambiguities.
Contract Bundles
Fixed price contract bundles consisting of one share of each of the contracts in this market can be purchased from or sold to the IEM system at any time. The price of each fixed price contract bundle is $1.25. Because the total number of seats must sum to 125, the total payoff from holding a contract bundle until the market closes is $1.25.
To buy or sell fixed price contract bundles from the system, use the “Bundle Orders” option from the Trading Console. Select “QUEB22_SS” and the radio button “Buy at Fixed Price” from the Bundle Orders list to buy bundles. Select “QUEB22_SS” and the radio button “Sell at Fixed Price” to sell bundles.
Bundles consisting of one share of each of the contracts in this market may also be purchased and sold at current aggregate market prices rather than the fixed price of $1.25. To buy a market bundle at current ASK prices, use the “Bundle Orders” option as above but select “QUEB22_SS” and the radio button “Buy at Market ASK Prices.” To sell a bundle at current market BID prices, select “QUEB22_SS” and the radio button “Sell at Market BID Prices.”
Bundle purchases will be charged to your cash account and bundle sales will be credited to your cash account.
This market will remain open until contract liquidation. Liquidation values will be credited to the cash accounts of market participants.
Market Access
Funds in a trader’s cash account are fungible across markets so new investment deposits are not required. Additional investments up to the maximum of $500 can be made at any time by using the “Adding to Your Investment” link found under “My Account” while logged into the IEM software. New traders can open accounts using the “Open An Account” button found at the IEM website, https://iem.uiowa.edu. There is a one-time account registration fee of $5.00, and investments are limited to the range of $5.00 to $500.
Requests to withdraw funds may be submitted at any time by completing the IEM’s Online Withdrawal Request form. Additional information about requesting withdrawals is available at the IEM website at https://iemweb.biz.uiowa.edu/accounts/withdrawals.html.