Potential Canadian Implications Of The Archegos Fallout

Global bank losses following the Archegos Capital Management (Archegos) fallout have now surpassed $10 billion, prompting renewed focus in the U.S. on disclosure requirements relating to ownership of public securities and related derivatives. Archegos is believed to have used a type of derivative called a total return swap in order to take leveraged, concentrated positions in a number of companies. These positions were unwound following margin calls, resulting in downward pressure on a number of blue-chip stocks and substantial losses to a number of banks that were counterparties to Archegos' swaps and unable to recover funds from Archegos. On May 6, 2021, Securities and Exchange Commission (SEC) Chairman Gary Gensler indicated that the SEC will consider regulatory changes in response to this March 2021 liquidation of Archegos' substantial stock positions. It will be interesting to see if a renewed focus on these issues in the U.S. leads to any corresponding review or