Montréal - The Autorité des marchés financiers (the "AMF") reminds OTC derivatives market participants in Québec that they are required to obtain a Legal Entity Identifier ("LEI") in order to comply with the new trade repository reporting rules in effect on October 31, 2014.
Under Regulation 91-507 respecting trade repositories and derivatives data reporting, clearing houses, dealers or Canadian financial institutions acting as local counterparties to an OTC derivatives transaction must report derivatives data to a trade repository recognized by the AMF as of October 31, 2014. These data will be reported by the counterparty designated as the reporting counterparty to the transaction, namely, the counterparty best suited technologically to fulfill this obligation.
All parties involved in an OTC derivatives transaction must, however, be identified by an LEI: both counterparties to the transaction, the clearing member or the dealer that is not a counterparty to the transaction, the electronic trading platform where the transaction is executed and the clearing house where the transaction is cleared, as applicable. To help reporting counterparties fulfill their obligations, a non-reporting counterparty must provide all relevant information to the reporting counterparty, including its LEI.
The LEI, a 20-digit alphanumeric code compliant with ISO 17442 standard also required when reporting data in other jurisdictions such as the U.S. (CFTC) and Europe (EMIR), may be obtained by contacting a local operating unit ("LOU"). The list of endorsed LOUs is available at www.leiroc.org This link will open in a new window.
The AMF is aware of the challenge for counterparties to obtain LEIs before October 31. Nonetheless, the AMF strongly encourages derivatives market participants to make the necessary efforts to obtain their LEIs as soon as possible.
Legislative barriers prohibiting the disclosure of the identity of counterparties in a foreign jurisdiction, in particular, privacy or related laws, may restrict the information that can be submitted to a trade repository. A market participant in such circumstances will be able to file an application with the AMF to be exempt from disclosing the identity of its counterparty when reporting a transaction.
These new reporting obligations are a key element toward the reforms sought by the G20 and the AMF's commitment to improve transparency in the OTC derivatives market and more effective regulatory oversight. The data gathered by trade repositories will enhance the ability to identify and address systemic risk and the risk of market abuse.
The Autorité des marchés financiers (the "AMF") is the regulatory and oversight body for Québec's financial sector.
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Sylvain Théberge: 514-940-2176
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