CSA has updated proposals to bolster investor protection
Canada’s securities regulators are asking for feedback on proposals to tighten the laws on derivatives trading and advice.
The Canadian Securities Administrators is proposing to establish a business conduct regime for regulating dealers and advisers in over-the-counter (OTC) derivatives in Canada.
The new consultation follows one a year ago and includes some revisions to the original plan.
“Following a careful review of the submissions received with respect to our first consultation, we have revised the Proposed Instrument and introduced changes that enhance investor protection while preserving market liquidity and access,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
Consistency is the key
The CSA split the proposed derivatives business conduct and derivatives registration regime into two separate rules to ensure that all dealers and advisors remain subject to certain minimum standards in all Canadian jurisdictions.
The proposals include an amendment to the definition of “eligible derivatives party”, which now includes a category for a commercial hedger, a revision to some of the restrictions on derivatives party assets and a change to certain senior manager obligations.
The intention is that there will be uniform regulation of derivatives trading and advice across Canada and that dealers and advisors are consistently regulated with facing a competitive disadvantage.
“The proposed rules are an important milestone for Canada,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “They will help protect against market abuse and together, the proposed business conduct instrument along with the proposed registration instrument, will align us with international standards.”
The full proposal and consultation is available on CSA member’s websites including the provincial securities regulators.
