Securities CSA

Toronto and Montreal – The Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 93-101 Derivatives: Business Conduct and a related proposed companion policy. The proposed instrument establishes an investor protection regime for over-the-counter (OTC) derivatives markets that is consistent with international standards and foreign requirements and is intended to create a uniform approach to derivatives business conduct regulation in Canada.

“This is an important milestone for Canada in the regulation of over-the-counter derivatives,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “The proposed business conduct regime will protect investors, improve transparency and accountability, and protect against market abuse.”

The proposed instrument sets out fundamental obligations for OTC derivatives dealers and advisers. These include a fair dealing model suitable for derivatives markets that contains obligations to identify and respond to conflicts of interest; know-your-derivatives party obligations; and compliance and recordkeeping requirements.

For derivatives dealers and advisers working with non-institutional counterparties, the proposed instrument introduces further measures such as a derivatives-specific suitability standard, the requirement to identify derivatives party-specific needs, and disclosure regarding leverage.

As a significant proportion of OTC derivatives trading is cross-border, the proposed instrument includes exemptions for foreign derivatives dealers and advisers that are subject to and comply with comparable laws of certain foreign jurisdictions.

The CSA is also in the process of developing a registration regime for derivatives dealers and advisers. The CSA anticipates publishing proposed NI 93-102 Derivatives: Registration shortly. An extended comment period (150 days) is in effect for the proposed business conduct regime to provide stakeholders an opportunity to consider it in conjunction with the proposed registration regime.

The proposed instrument and companion policy can be found on CSA members’ websites.

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

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For more information:

Kristen Rose
Ontario Securities Commission
416-593-2336

Sylvain Théberge
Autorité des marchés financiers
514-940-2176

Alison Walker
British Columbia Securities Commission
604-899-6713

Nicole Tuncay
Alberta Securities Commission
403-297-4008

Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660

Andrew Nicholson
Financial and Consumer Services Commission
New Brunswick
506-658-3021

Jane Anderson
Nova Scotia Securities Commission
902-424-0179

Janice Callbeck
Office of the Superintendent of Securities
P.E.I.
902-368-6288

John O'Brien
Office of the Superintendent of Securities
Newfoundland and Labrador
709-729-4909

Rhonda Horte
Office of the Yukon Superintendent of Securities
867-667-5466

Jeff Mason
Nunavut Securities Office
867-975-6591

Tom Hall
Office of the Superintendent of Securities
Northwest Territories
867-767-9305

Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan
306-798-4160