The Canadian Securities
Administrators yesterday released an update on the
proposed local rules designed to set out certain requirements in
relation to the application process for seeking recognition as a
clearing agency (or an exemption from the recognition requirement),
which were published in December 2013.
According to the update provided yesterday, however, the CSA now
intend to develop a proposed national instrument that takes into
consideration the comments received in response to the earlier
local proposals, and that applies across all Canadian jurisdictions
to facilitate uniform, consistent and transparent requirements for
clearing agencies across the country. The new regulatory framework
is also intended to facilitate ongoing compliance by recognized
clearing agencies with international minimum standards applicable
to financial market infrastructures (FMIs).
The CSA note that the proposed national instrument would further
facilitate the efforts of Canadian CCPs to meet the
"qualifying CCP" (QCCP) status under the Basel III and
Canadian banking guidelines. The notice reminds market participants
that Canadian and foreign banks that have certain counterparty
exposures to Canadian CCPs would be subject to higher capital
requirements if these CCPs do not meet the QCCP status.
The CSA also state that, as with the earlier proposed companion
policies, the companion policy to the proposed national instrument
will include supplementary guidance jointly developed by the CSA
and the Bank of Canada for domestic clearing agencies that are
regulated by CSA jurisdictions and the Bank of Canada. The CSA and
the Bank of Canada intend to publish for comment further joint
supplementary guidance on other standards.
The CSA note that the Bank of Canada has published the Joint
Supplementary Guidance related to liquidity risk on
its website for a 30-day comment period and state their intention
to republish the guidance related to liquidity risk later this fall
with the proposed national instrument and related companion policy.
The notice encourages prospective commenters to provide their
views, if any, during the Bank of Canada's comment period,
which expires on August 4, 2014 so that any feedback can be
incorporated in the next round of proposals.
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
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