Third Try: CSA Publishes Revised Mandatory Clearing Rules For OTC Derivatives

Introduction

The Canadian Securities Administrators ("CSA") on February 24, 2016 published for comment National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives (the "Revised Clearing Rule"), modifying the proposed requirements for clearing certain over-the-counter ("OTC") derivatives transactions through a regulated clearing agency. The publication of the Revised Clearing Rule represents the CSA's third articulation of clearing rules, following the publication of a model provincial clearing rule in January, 2014, and the publication of an initial draft clearing rule (the "Initial Clearing Rule") in February, 2015. The scope of the clearing obligation under the Revised Clearing Rule is significantly narrower than what was previously proposed under the Initial Clearing Rule. For an overview of the Initial Clearing Rule, please see our previous article.