Yesterday, the Bank of Canada said domestic market participants are able use any central counterparty-clearing (CCP) agency recognized by Canadian authorities — including global CCPs, reports the Ottawa Citizen.
Earlier in the year, officials said the bank was looking at developing a Canadian clearing agency to help regulators keep track of domestic operations. It planned to work with domestic financial industry and public policy institutions in the progress.
But, Canadian authorities have decided building an agency here would be too costly, says The Globe and Mail. Instead, they plan to monitor the CCPs used to ensure they meet four specific criteria; they must offer fair and open market access, as well as emergency liquidity arrangements in different currencies, for example.
In a recent statement, the Bank of Canada said, “Canadian authorities judge that global CCPs will provide a safe, robust and resilient environment for clearing OTC derivatives.”