U.S. Derivatives Trading By Canadian Fund Managers: Continued Dodd-Frank Fall-Out

Canadian fund managers that trade in over-the-counter (OTC) derivatives for their investment funds should be aware of two significant U.S. developments that can be expected to affect such trading; particularly since it is recommended that action be taken before the end of 2012.

• August 2012 DF Protocol (the Protocol) published by the International Swaps and Derivatives Association, Inc. (ISDA): The Protocol enables parties to master agreements for OTC derivatives to amend those agreements to fulfill statutory and regulatory requirements. Adhering to, or joining, the Protocol is not a statutory or regulatory requirement; instead, it is an ISDA-sponsored device to facilitate the amendment of master agreements for OTC derivatives in an efficient manner. December 2012 is the recommended deadline to adhere to the Protocol.