Derivatives Investments For Pension Plans: FSCO Guidance Note

The past few months have brought significant announcements regarding changes to the investment rules affecting pension plans, including, most recently, the federal Government's announcement of amendments to the federal investment rules and a consultation regarding the 30% rule. Perhaps somewhat overshadowed by these announcements has been the final version of the Guidance Note on Prudent Investment Practices for Derivatives released by the Financial Services Commission of Ontario (FSCO) in March.

The Guidance Note was released in draft form in October of last year and has been modified following a period of public comment. While the Guidance Note does not represent a legislative change, it is nonetheless significant in that it provides guidance as to the prudential expectations that the Ontario regulator has regarding derivatives investments.