CSA regulation of benchmarks and administrators is part of the international response following allegations of LIBOR manipulation in 2012.

  • MI 25-102 will allow regulators to designate and regulate financial benchmarks, administrators, contributors to benchmarks, and users and is expected to take effect on July 13, 2021.
  • The CSA intend to designate only RSBL as an administrator and only CDOR as a designated critical benchmark and a designated interest rate benchmark under MI 25-102.
  • Amendments to MI 25-102 were also proposed to introduce a designation and regulation regime in respect of commodity benchmarks and administrators.
  • The proposed amendments related to commodity benchmarks are open for stakeholder comment until July 28, 2021.

On April 29, the Canadian Securities Administrators (CSA) announced that certain of its members, including the British Columbia Securities Commission, Alberta Securities Commission, Ontario Securities Commission, and Autorité des marchés financiers, are adopting Multilateral Instrument 25-102 Designated Benchmarks and Benchmark Administrators (MI 25-102).

Pursuant to MI 25-102, regulators will have the ability to: (i) designate and regulate benchmarks; (ii) designate and regulate persons and companies that administer designated benchmarks; (iii) regulate persons and companies that contribute certain data that is used to determine designated benchmarks; and (iv) regulate certain benchmark users. The regulatory model will be similar to that used for exchanges and self-regulatory organizations, whereby each designated benchmark and administrator will have one or more CSA members act as its lead or co-lead authority. The lead or co-lead authority will be primarily responsible for the oversight of the benchmark or administrator.

MI 25-102 was first proposed in March 2019 as a result of the reliance placed on certain financial benchmarks and the risks of misconduct that could impact investors and other market participants. According to the CSA, the intention is to initially designate the Canadian Dollar Offered Rate (CDOR) as a benchmark and its administrator Refinitiv Benchmark Services (UK) Limited (RBSL) as an administrator. The CSA may designate other administrators or benchmarks in the future where it would be in the public interest to do so.

Subject to Ministerial approvals, MI 25-102 and its Companion Policy will take effect on July 13, 2021. The proposed amendments to MI 25-102, which would introduce a regulatory regime in respect of commodity benchmarks and their administrators, are open for comment from stakeholders until July 28, 2021.

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