The Canadian Securities Administrators (CSA) will host a virtual roundtable on the proposed derivatives business conduct rule, the CSA’s next step towards modernizing the regulatory framework for the OTC derivatives market in Canada.
Proposed rules were initially published a number of years ago to set up a comprehensive regime for regulating the business conduct of participants in the overthecounter (OTC) derivatives markets. Two consultation periods have taken place, but now the CSA has revised the Proposed Rules, adding in comments from industry members interested in a balance of investor protection, preserving derivatives market access and the impact of compliance costs.
According to a paper from law firm McCarthy Tetrault, a number of proposed changes to the rules have been made. One of them has to do with derivatives advisors who are registered under securities legislation or commodity futures legislation in Canada. These advisors would now be able to leverage their existing compliance systems and are exempt from certain provisions of the Proposed Rules.
The CSA has exempted IIROC dealer members from many provisions of the Proposed Rules, including knowyourderivatives party, suitability and pretransaction disclosure obligations as well as the senior derivatives manager regime, when they comply with corresponding conduct and other regulatory IIROC requirements relating to a transaction with a derivatives party, said the law firm’s paper.
As well, the CSA has exempted Canadian financial institutions from certain provisions of the Proposed Rules, including the knowyourderivatives party and tied selling.
The roundtable will be held on September 28, 2022 from 10:00 a.m. – 12:00 p.m. ET.
