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 (AMF).
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.
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.
