The Ontario Securities Commission (OSC),
Quebec's Autorité des marchés financiers
(AMF) and the Manitoba Securities Commission earlier this
week published for comment proposed local rules that would set out
certain requirements in relation to the application process for
seeking recognition as a clearing agency (or an exemption from the
recognition requirement) under local rules, as well as the ongoing
requirements for recognized clearing agencies that act as central
counterparties, central securities depositories or securities
The requirements under proposed Rule 24-503 Clearing Agency
Requirements in Ontario and Manitoba and Regulation 24-503
respecting Clearing House, Central Securities Depository and
Settlement System Requirements in Quebec are generally based on the
Principles for Financial Market Infrastructures
(PFMI) developed by the Committee on Payment and Settlement Systems
(CPSS) of the Bank for International Settlements and the Board of
Organization of Securities Commissions (IOSCO). The PFMI set
out in the April 2012 CPSS/IOSCO consultative report are considered
to be minimum international standards for payment, clearing and
settlement systems which must be implemented globally to strengthen
core financial infrastructures and markets (including derivatives
markets) and critical market infrastructures, and to limit systemic
The Canadian regulators note that implementation of the
principles is an integral part of their efforts to develop a
comprehensive regulatory framework for the trading of derivatives
in Canada and is crucial to satisfying Canada's G20 commitments
for OTC derivatives market regulatory reforms.
To that end, the proposed rules incorporate the PFMI "to
the extent possible" and include requirements in respect
of, among other things, (i) governance; (ii) credit risk;
(iii) collateral; (iv) margin; (v) liquidity risk;
(vi) settlement finality; (vii) money settlements;
(viii) physical deliveries; (ix) central securities
depositories; (x) participant default rules and procedures;
(xi) segregation and portability; (xii) general business
risk; (xiii) custody and investment risks;
(xiv) operational risks; (xv) access, participation and
due process requirements; (xvi) efficiency and effectiveness;
and (xvii) transparency.
The proposals include additional guidance provided by the PFMI
Coordinating Group made up of staff of the OSC, the AMF, the
British Columbia Securities Commission and the Bank of Canada on
the application of the PFMI in the Canadian market context.
The securities regulators in British Columbia, Alberta,
Saskatchewan, New Brunswick and Nova Scotia intend to develop
a materially similar multilateral rule in the future.
The proposals are open for comments until March 19, 2014, with a
planned adoption of the rules by June 30, 2014.
The regulators further intend to implement specific
requirements over the next two years, with all requirements
expected to come into force by January 1, 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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