The Reporter provides a monthly summary of significant
international and Canadian federal legislative and regulatory
developments of relevance to federally regulated financial
institutions in Canada. It does not address provincial financial
services legislative and regulatory developments, although this
information is tracked by BLG and can be provided on request.
In addition, purely technical and administrative changes (such as
changes to reporting forms) are not covered.
In January, the Bank of Canada announced its intention to add
certain Canadian-dollar term asset- backed securities (ABS) to its
list of assets eligible as collateral under the Bank of
Canada's SLF. A consultation period followed and the comments
received from market participants were taken into consideration.
Two modifications have been made relative to the initial conditions
The changes proposed are to acknowledge the reality that data
collection and systems requirements of a foreign jurisdiction may
not be readily compatible with the data and system requirements
imposed in the By-law. The amendments extend the time within which
a member institution is required to provide information from its
foreign branches in a resolution scenario. Further, the amendments
relieve a member institution from providing certain information
about deposit liabilities posted at foreign branches and from
ensuring that a foreign branch has certain specified
Reduction of systemic risk. A substantial fraction of
derivatives are not standardised and cannot be centrally cleared.
Margin requirements for non-centrally cleared derivatives would be
expected to reduce contagion and spillover effects by ensuring that
collateral is available to offset losses caused by the default of a
Promotion of central clearing. In many jurisdictions, central
clearing will be mandatory for most standardized derivatives. But
clearing imposes costs, in part because CCPs require margin to be
posted. Margin requirements on non-centrally cleared derivatives,
by reflecting the generally higher risk associated with these
derivatives, will promote central clearing, making the G20's
original 2009 reform programme more effective.
Relative to the2013 framework, the full phase-in schedule
has been adjusted to reflect this nine-month delay, from
1 December 2015
to 1 September
The revisions also institute a six-month
phase-in of the requirement to
exchange variation margin, beginning 1 September
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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