The Canadian Securities Administrators has published for comment a new rule that aims to clarify the responsibilities of third-party OTC derivatives clearing agencies.
Due to Canadian and international initiatives relating to the clearing of OTC derivative transactions, says CSA, some market participants that aren’t clearing members must now use third-party agencies to put through OTC derivatives transactions.
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As such, the rule aims to ensure that indirect customer clearing still provides investors with a high level of protection. It provides guidance on segregation and on the use of customer collateral, as well as on record keeping and disclosure about collateral held by investors.
“It imposes requirements on clearing agencies and their participants that will protect derivatives market participants in times of financial stress and will facilitate the transfer of customer positions and collateral,” says Bill Rice, chair of CSA, and CEO of the Alberta Securities Commission.
CSA welcomes feedback on the proposal. The comment period is open until March 19, 2014.