CANADA: CSA Publishes Proposals for Derivative Rule for Central Counterparty Clearing

Thursday February 25 2016

On 24^th February 2016, the Canadian Securities Administrators (CSA) published for comment Proposed National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives and its companion policy (the proposed instrument), which introduces requirements for central counterparty clearing of certain over-the-counter (OTC) derivatives transactions.

Mandatory central counterparty clearing is intended to mitigate counterparty risk in the derivatives market and increase financial stability.

The proposed instrument establishes:

• the determination of the derivatives (each a mandatory clearable derivative) that will be subject to the requirement to submit for central counterparty clearing; and
• the requirement (and limited exemptions)to submit a transaction involving a mandatory clearable derivative to a recognized or exempted central counterparty for clearing.

Following the current consultation, the CSA will review all comments received and make amendments as appropriate to the proposed instrument. The 90-day comment period is open until May 24, 2016.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian financial markets.

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