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ARTICLE · 03 JUNE 2008

What Are Eligible Financial Contracts?

Blake, Cassels & Graydon LLP
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The Canadian government has recently changed how it defines eligible financial contracts. For the derivatives industry, the new definition appears to give deference to the over-the-counter commodities market in determining what is an eligible financial contract.

CanadaInsolvency/Bankruptcy/Re-Structuring
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
Kelly Bourassa
Kelly Bourassa
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Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Restructuring & Insolvency, May, 2008

The Canadian government has recently changed how it defines eligible financial contracts. For the derivatives industry, the new definition appears to give deference to the over-the-counter commodities market in determining what is an eligible financial contract.

Introduction

Since the inclusion of eligible financial contract provisions in the Companies' Creditors Arrangement Act (CCAA) in 1997, there have been two appeal level decisions in Canada reviewing and interpreting the legislation. Against this backdrop, Parliament passed legislation in June 2007 amending the legislative landscape for eligible financial contracts. In November 2007, the Eligible Financial Contact General Rules (CCAA) (the EFC General Rules) were registered. In this bulletin, we review

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