On March 14, 2014, the International Swaps and Derivatives Association, Inc. (ISDA) published Canadian Representation Letter #1: Trade reporting and Other Obligations, a copy of which can be found [here]. The purpose of this Representation Letter is to assist market participants in addressing their obligations under the over-the-counter derivatives trade reporting rules in Canada. To date, each of the Ontario Securities Commission, the Manitoba Securities Commission and the Autorité des marchés financiers have published their own respective Rule 91-507 Trade Repositories and Derivatives Data Reporting. Reporting obligations under these rules begin on July 2, 2014 for trades involving a clearing agency or a dealer and on September 30, 2014 for trades that do not involve a clearing agency or a dealer.

Market participants should note that the execution and exchange of the Representation Letter with their counterparties will only address or facilitate some of the reporting obligations under the Canadian trade reporting rules. We recommend that you review your ISDA and similar agreements under which you enter into trades that are caught by the Canadian trade reporting rules and make any necessary amendment to ensure that you are able to comply with your reporting obligations under these rules. The amendments required are fact dependent, based on the identity of, and your arrangements with, your counterparty. We would be pleased to assist you in determining the exact steps that you should take now to be ready for trade reporting in July.

Contact Us

If you would like further information or would like to discuss how to address your reporting obligations under the Canadian trade reporting rules, please contact the authors of this alert or any other member of the BLG Derivatives Group.

BLG’s Derivatives Group is a multi-disciplinary team of lawyers that cuts across several of our practice groups. The lawyers in BLG’s Derivatives Group are experienced in negotiating derivatives documentation with sell-side and buy-side market participants around the world. Our clients include financial institutions, investment dealers, futures commission merchants, market intermediaries, securitization conduits and a wide variety of derivative end-users, such as mutual funds, hedge funds, pension funds, other investment vehicles, commodity producers, real estate firms, insurance companies, risk management firms and other corporate end-users. Our advice covers derivative structuring and document negotiation, regulatory compliance, tri-party collateral control practices  and close-out issues. We also advise on compliance and registration requirements relating to derivatives in Canada and the United States.

Author

Carol E. Derk 
CDerk@blg.com
416.367.6181

Expertise

Banking and Financial Services
Derivatives