As a follow-up to
our earlier posts, the International Swaps and Derivatives Association,
Inc. (ISDA) has developed, in consultation with industry
participants in the ISDA Canada Working Group, a number of useful
tools for buy-side participants, including asset managers, fund
managers and other non-dealer market participants or
"end-users" in the Canadian OTC derivatives
markets. On May 23, ISDA published a FAQ for Non-Dealers on Canadian Trade Reporting
Obligations which outlines key regulatory requirements
relating to the reporting of derivatives transaction data and the
procedures developed by the derivatives industry to facilitate
dealer and end-user compliance with the
new requirements under Rule 91-507 as adopted by the Ontario
Securities Commission (OSC), the Manitoba Securities Commission
(MSC) and the Autorité des marchés financiers
The FAQ provides useful guidance on key requirements as they
affect end-users, including the types of derivatives that are
reportable, reporting responsibilities and the need to obtain a
Legal Entity Identifier (LEI) and to make representations to and
certain agreements with dealer counterparties. These
representations may be made by delivering a form of "Canadian Representation Letter" (attached
to the FAQ). End-users may complete the Canadian Representation
Letter either directly or through an on-line service provided
jointly by ISDA and Markit known as "ISDA Amend", which
enables these representations and agreements to be made to multiple
counterparties at once. ISDA Amend is available free of charge to
Buy-side counterparties in the Canadian OTC derivatives markets
are expected to prepare as soon as possible to be ready to comply
when the Canadian reporting obligations begin on October 31, 2014.
Other tools developed by ISDA in connection with these rules and
posted on the ISDA "Canada" page include A Summary of Canadian Trade Reporting
Requirements (April 30, 2014 update), a PowerPoint slide deck
that describes the applicable requirements in greater detail. Both
the OSC and the AMF have also developed detailed presentations
on the rules and on the LEI requirements. As
reported in our previous posts, the OSC, the MSC and the AMF
have introduced rule changes to push back the effective date of
reporting obligations under Rule 91-507 to October 31, 2014 for
clearing agencies and dealers, and June 30, 2015 for all other OTC
derivatives market participants.
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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