CANADA: Canadian Securities Administrators Seek Comment on CSA Staff Notice 91-304 Model Provincial Rule Derivatives: Customer Clearing and Protection of Customer Collateral and Positions, (Model Rule)

Monday January 20 2014

The Canadian Securities Administrators (CSA) has published for comment CSA Staff Notice 91-304 Model Provincial Rule Derivatives: Customer Clearing and Protection of Customer Collateral and Positions, (Model Rule). The Model Rule is intended to increase the protection of customer collateral and positions, and to increase the resilience of derivatives clearing agencies.

Canadian and international initiatives mandating the clearing of over-the-counter (OTC) derivative transactions will cause certain market participants, who are not clearing members at a derivatives clearing agency, to clear their OTC derivatives transactions indirectly through market participants that are clearing members (or otherwise provide clearing services). The Model Rule would ensure that customer clearing provides customers with a high level of protection. The rule requirements relate to segregation and use of customer collateral, as well as record keeping and disclosure about collateral held.

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