The ASC has advised clearing agencies that are currently
carrying on business in Alberta, or that expect to do so, to ensure
that they file applications for recognition well in advance of
December 31, 2016. Blanket Order 24-504 follows ASC Notice 24-701 - Regulation of Clearing Agencies
Carrying on Business in Alberta (ASC Notice 24-701)
which was published in June 2015 and which provides guidance to
clearing agencies seeking to be recognized by the ASC. The term
"clearing agency" is defined in section 1(f) of the
Securities Act (Alberta) to be a person or company that:
(i) in connection with trades in
(A) acts as an intermediary in paying
funds or delivering securities, or both,
(B) provides centralized facilities through which trades in
securities are cleared, or
(C) provides centralized facilities as a depository of
(ii) in connection with trades in
derivatives, provides centralized facilities for the clearing and
settlement of trades in derivatives and that, with respect to a
contract, instrument or transaction,
(A) enables each party to a
derivatives trade to substitute, through novation or otherwise, the
credit of the clearing agency for the credit of the parties,
(B) arranges or provides, on a multilateral basis, for the
settlement or netting of obligations resulting from a derivatives
(C) otherwise provides clearing services or arrangements that
mutualize or transfer among participants in the clearing agency the
credit risk arising from derivatives trades;
ASC Notice 24-701 states staff's view that a clearing agency
whose clearing activities have a real and substantial connection to
the Alberta capital markets should be regulated by the ASC on the
basis that it is carrying on business in Alberta. A clearing agency
that would have "a real and substantial connection to
Alberta" includes one that is: (i) systemically important to
the Alberta capital market; (ii) based in Alberta; (iii) provides
direct clearing services in Alberta; or (iv) provides direct or
indirect clearing services for an exchange recognized in Alberta,
if the ASC is the lead or joint regulator of the exchange.
A clearing agency carrying on business in Alberta may be granted
an exemption from recognition, for example, where it is based
outside of Alberta and is regulated and under the direct oversight
of another regulatory authority with a regulatory regime comparable
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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