On November 27, the CSA published for comment proposed harmonized rules respecting clearing
agencies 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),
as well as the ongoing requirements for recognized clearing
agencies that act as central counterparties, central securities
depositories or securities settlement systems.
The requirements under proposed National Instrument 24-102
Clearing Agency Requirements and its Companion
Policy 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 the International
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 risks.
To that end, the proposed rules 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
requirements; and (xvi) efficiency and effectiveness.
As we previously discussed, Canadian regulators
previously proposed similar local rules last year. The more recent
proposal is intended to achieve the same objectives as the proposed
local rules while taking a harmonized approach across the country.
The CSA are accepting comments on the proposal until
February 10, 2015.
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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