Under the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Dodd-Frank Act) certain amendments were
made to the Commodity Exchange Act (U.S.) (the CEA) to
establish a new regulatory framework for swaps. Among other
changes to the CEA, the Dodd-Frank Act established SEFs as
a new regulated market category, and required that the execution of
certain swaps occur on a designated contract market or SEF.
The Dodd-Frank Act defines an SEF as "a trading system or
platform in which multiple participants have the ability to execute
or trade swaps by accepting bids and offers made by multiple
participants in the facility or system, through any means of
interstate commerce, including any trading facility that: (A)
facilitates the execution of swaps between persons; and (B) is not
a designated contract market." The CFTC's final SEF Rule, adopted on May 16,
2013 (the SEF Rule), formalizes this definition and establishes
registration requirements for SEFs as well as core principles to
govern the operation of SEFs.
The SEF Rule had an effective date of August 5, 2013 with
general compliance required as of October 2, 2013. The CFTC
granted temporary registration to a number of SEFs in advance of
the October 2 deadline to be effective until the CFTC has fully
reviewed each SEF application for full compliance with the
applicable requirements under the CEA and the SEF Rule.
While securities legislation in Ontario does not define the term
"exchange", the Companion Policy to National Instrument 21-101 Marketplace
Operation provides that Canadian Securities regulators would
generally consider a "marketplace" to be an exchange
where it, among other things, sets requirements governing the
conduct of its participants and disciplines marketplace
participants by means other than exclusion from trading. While
a comprehensive framework for the regulation of derivatives in
Ontario has yet to be enacted, effective December 8, 2010, the
definition of "marketplace" under the Securities Act (Ontario) was expanded from its
application to securities only to apply to any person or company
that "constitutes, maintains or provides a market or facility
for bringing together buyers and sellers of securities or
In order to comply with the SEF Rule, one of the many
obligations of a regulated SEF is to have requirements governing
the conduct of its participants, to monitor compliance with those
requirements and to discipline participants, including by means
other than exclusion from the marketplace.
Accordingly, OSC staff state in the Staff Notice that
"[b]ecause SEFs have self-regulatory responsibilities, they
are considered "exchanges" under Ontario securities law.
If an SEF provides access to participants in Ontario, it is
considered to be doing business in Ontario and must be recognized
as an exchange or obtain an exemption from recognition."
Consequently, the OSC granted temporary relief to a number of SEF
applicants from the requirement to be recognized as an exchange,
subject to a number of conditions, including the requirement to
submit a more fulsome application for a subsequent relief order
which is to replace the temporary relief. It is also a condition of
the temporary relief orders that the SEF will not provide direct
access to an Ontario participant unless the Ontario participant is
appropriately registered as applicable under Ontario securities
laws or is exempt from or not subject to those requirements, and
qualifies as an "eligible contract participant" under the
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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