OSC publishes amendments to OTC derivatives trade reporting rule

The OSC today published final amendments to OSC Rule 91-507 Trade Repositories and Derivatives Data Reporting (TR Rule) and its companion policy.

The amendments will increase transparency in the Canadian over-the-counter (OTC) derivatives market through public dissemination of transaction-level data and provide exclusions from the reporting requirement for certain OTC derivatives transactions between affiliates.

“These amendments are intended to effectively protect counterparties and maintain fairness in the market,” said Kevin Fine, director of the Derivatives Branch at the OSC. “With regards to the public dissemination of transaction-level data, we have sought to balance the benefits of post-trade transparency against the need for appropriate anonymity to support market participants’ ability to hedge risk.”

The transaction-level data required to be publicly disseminated and related asset classes are set out in Appendix C to the TR Rule. These transaction details are subject to a publication delay and additional anonymity precautions. Moving forward, OSC Staff intend to study and consult on additional data and product types that may be appropriate for public dissemination.

The amendments also remove reporting obligations under the TR Rule for derivatives transactions between counterparties that are affiliates of one another but are neither derivatives dealers nor clearing houses.

Staff will continue to study the use of inter-affiliate derivatives transactions as a strategy of corporate group risk distribution and to monitor international regulators’ approaches to end-user inter-affiliate trade reporting.

The OSC has worked with the CSA’s Derivatives Committee to make harmonized changes to province-specific rules. Securities regulators in Quebec and Manitoba are publishing similar amendments concurrently.

Provided all Ministerial approvals are obtained, the amendments will come into force on July 29, 2016. The effective date for public dissemination of transaction-level data has been delayed to January 16, 2017.

Staff

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