The Office of the Superintendent of Financial Institutions Canada (OSFI) yesterday released a progress update with respect to the implementation of G-20 reforms for OTC derivatives markets.
According to OSFI, federally-regulated deposit-taking institutions can expect updates to various guidelines, including the Derivatives Best Practices Guideline (B-7), during 2013 in response to international regulatory convergence. OSFI also notes that central clearing principles and other changes to bilateral counterparty risk management will be reflected in Guideline B-7. Meanwhile, while capital requirements for large bank-to-bank and bank-to-shadow bank exposures in OTC derivatives markets have been increased with the recent updates to OSFI's Capital Adequacy Requirements guideline, additional capital requirements for the risk of credit valuation adjustments to derivatives are being delayed until January 2014.
OSFI's initiatives in this area complements the work currently being undertaken by the Canadian Securities Administrators towards fulfilling its G-20 commitments to regulate OTC derivatives markets.
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