IIROC has announced the publication of an industry-developed Code of Conduct for banks on the submission panel of the Canadian Dollar Offered Rate (CDOR) interest rate benchmark.
The panel of CDOR submitters developed the voluntary Code in consultation with IIROC and the Bank of Canada. The Code underscores the industry’s commitment to enhanced governance and transparency for this important Canadian benchmark.
The Code includes minimum standards for submission methodology, internal oversight and record retention. CDOR’s acronym has also reverted back to the “Canadian Dollar Offered Rate” from the previously used “Canadian Dealer Offered Rate” reflecting the fact that all CDOR panel members are now banks.
In 2013, IIROC published a review of CDOR supervisory practices that focused on key areas for strengthening the integrity of, and confidence in, CDOR. Development of the Code is one of the steps being taken to improve Canadian reference rates following both the IIROC review and the establishment by the International Organization of Securities Commissions (IOSCO) of new global principles for financial benchmarks.
In addition, CDOR’s governance will be strengthened through the appointment of an Administrator with responsibility for the day-to-day operation of the benchmark, in line with the IOSCO principles. As a result, the CDOR panel member banks have announced today, through the Canadian Bankers Association, their intention to launch an Administrator Tender Notice.
In January 2014, the Office of the Superintendent of Financial Institutions announced that it would develop an oversight program to supervise the effectiveness of governance and risk controls for the CDOR submission processes. On May 30, OSFI issued for public consultation a draft guideline that sets out its expectations for CDOR submitting banks.
With these developments, and with CDOR submissions now coming exclusively from banks rather than investment dealers, IIROC is no longer involved in the oversight of CDOR or the panel members.
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