Canadian Regulators Release Proposals For Mandatory CCP Clearing Of Derivatives

The CSA yesterday published for comment the CSA Staff Notice 91-303Proposed Model Provincial Rule on Mandatory Central Counterparty Clearing of Derivatives (the Proposed CCP Model Rule).

The Proposed CCP Model Rule sets out requirements for central counterparty (CCP) clearing of OTC derivatives transactions.  The purpose of the rule is to enhance market transparency and the overall mitigation of risks in OTC derivatives markets through the introduction of requirements for CCP clearing of previously bilaterally cleared or uncleared derivatives transactions.

The CSA Derivatives Committee, in its Consultation Paper 91-406 Derivatives OTC Central Counterparty Clearing published in June 2012, had sought public comment on a number of recommendations relating to the clearing of eligible OTC derivatives which have been incorporated into the Proposed CCP Model Rule.