Canadian securities regulators seek input on the proposed derivatives registration rule

2018/25
April 19, 2018

Vancouver  - The Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 93-102 Derivatives: Registration and Proposed Companion Policy 93-102 Derivatives: Registration (collectively, the Proposed Instrument). The Proposed Instrument establishes a new regime for the registration of dealers and advisers transacting in the over-the-counter (OTC) derivatives markets in Canada. 

The Proposed Instrument together with Proposed National Instrument 93-101 Derivatives: Business Conduct (NI 93-101), which was published for comment on April 4, 2017, establishes a comprehensive investor protection regime for OTC derivatives markets that is consistent with international standards and foreign requirements. The CSA has developed the Proposed Instrument to help protect investors, reduce risk, and improve transparency and accountability in the OTC derivatives markets.

"Canadian firms, large and small, as well as individuals, are using the OTC derivatives market to hedge their business and financial risks and for speculative purposes," said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. "We believe the proposed registration regime will allow securities regulators to contribute to protecting these firms and individuals in their derivatives activities by establishing minimum standards of integrity, solvency and proficiency for firms and individuals offering OTC derivatives products or related advice."

"Many of the entities that would be required to be registered under the Proposed Instrument are already subject to other regulatory regimes," continued Mr. Morisset.  "The Proposed Instrument includes provisions to minimize duplicative regulation for these entities." 

In developing the Proposed Instrument, the CSA leveraged the existing registration regime in the securities market while tailoring the requirements to the OTC derivatives market. The Proposed Instrument sets out fundamental obligations for OTC derivatives dealers and advisers. These include requirements designed to mitigate risks to market participants, requirements for key staff members of derivatives dealers and advisers to have specific education, training and experience, and requirements for firms and individual representatives to register with applicable securities regulators in Canada.

The Proposed Instrument provides exclusions and exemptions for certain persons or companies from the requirements to register as a derivatives dealer or as a derivatives adviser subject to certain conditions.  

The CSA anticipates publishing NI 93-101 for a second comment period during the consultation period for the Proposed Instrument. The CSA is holding an extended comment period (150 days) on the Proposed Instrument, to give stakeholders the opportunity to consider the Proposed Instrument and NI 93-101 together. Comments should be submitted in writing on or before September 17, 2018.

The Proposed Instrument 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: 
   
Alison Walker
British Columbia Securities Commission
604-899-6713
 
Kristen Rose
Ontario Securities Commission
416-593-2336 
Hilary McMeekin
Alberta Securities Commission
403-592-8186
Sylvain Théberge
Autorité des marchés financiers
514-940-2176 
 
Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660


Erin King
Financial and Consumer Services 
Commission, New Brunswick
506-643-7045

David Harrison
Nova Scotia Securities Commission 
902-424-8586

 
Steve Dowling
Government of Prince Edward Island, 
Superintendent of Securities
902-368-4550
 
Craig Whelan
Office of the Superintendent of Securities 
Newfoundland and Labrador
709-729-5661


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


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