CSA Release Model Rules Concerning Customer Clearing Of OTC Derivatives

The Canadian Securities Administrators today released model provincial rules and related guidance in regards to customer clearing of OTC derivatives and the protection of customer collateral and positions.

Specifically, the proposal sets out requirements in regards to the treatment of customer collateral,  recordkeeping, reporting and disclosure, and the transfer of positions. Ultimately, the intention of the CSA is to ensure that customer clearing proceeds in a manner that protects customer collateral and positions, and improves clearing agencies' resilience in the case of a clearing member default.

The proposal follows the publication of a number of consultations and proposals concerning OTC derivatives, including the recent publication of proposed model rules respecting mandatory central counterparty clearing of derivatives, as well as the February 2012 CSA consultation paper on segregation and portability in OTC derivatives clearing.