Effective September 28, 2024, National Instrument 93-101 – Derivatives Business Conduct (the Rule) comes into force.
The Rule sets out new requirements relating to, among other things, fair dealing, conflicts of interest, suitability, reporting of non-compliance, compliance and recordkeeping for participants in the Canadian OTC derivatives markets.
The Rule applies to persons or companies that engage in or hold themselves out as engaging in (i) the business of advising others in respect of derivatives (derivatives advisers), and (ii) the business of trading in derivatives as principal or agent (derivatives dealers and, collectively with the derivatives advisers, the derivatives firms). The Rule therefore generally also applies to derivatives firms based outside Canada (foreign derivatives advisers and foreign derivatives dealers, collectively foreign derivatives firms).
Foreign derivatives firms may qualify for an exemption from the requirements of the Rule provided they meet certain conditions set out in the Rule and provided they file on or about September 28, 2024 with the securities regulator in each Canadian jurisdiction where they participate in the Canadian OTC derivatives markets a prescribed form (Form 93-101F1) to submit to each such jurisdiction and appoint an agent for service of process in each such jurisdiction.
You are invited to contact the authors or any member of our Derivatives Group for advice on how the Rule may apply to your business, whether your foreign derivatives firm qualifies for an exemption from the Rule and for assistance with preparing and filing Form 93-101F1 by September 28.
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