IIROC publishes review of CDOR supervisory practices

The Investment Industry Regulatory Organization of Canada (IIROC) today published the results of its review of the Canadian Dealer Offered Rate (CDOR).

“IIROC initiated this policy review of current practices among CDOR survey participants in 2012 in light of global developments relating to survey-based reference rates and to strengthen the oversight of CDOR going forward,” said Susan Wolburgh Jenah, IIROC president and CEO.

IIROC’s recommendations regarding key areas for enhancement to strengthen the integrity and confidence in CDOR include:

• specific documented criteria for participation in the rate setting process;

• more explicit documentation regarding the definition, calculation methodology and transparency of CDOR; and

• documented regulatory expectations for participants’ supervision of rate-setting activity and controls to prevent potential manipulation.

The Bank of Canada, federal Department of Finance, and other Canadian regulators have agreed to consider further, in conjunction with IIROC, the implications for CDOR of the issues identified in IIROC’s review as well as relevant issues identified in ongoing international work in relation to the use and regulation of reference rates.

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