From the Regulators

The intention is to reduce the reporting burden on some OTC derivatives market participants

By James Langton |

In an effort to reduce the regulatory burden and improve the cross-border harmonization of over-the-counter (OTC) derivatives market reforms, the Ontario Securities Commission (OSC) is proposing further amendments to trade reporting rules that are due to take effect later this year.

The OSC published further amendments to its rule requiring derivatives data reporting to trade repositories. The OSC indicates that the proposed amendments are intended to ease the reporting burden on certain OTC derivatives market participants, and to enhance the data that is reported to the OSC.

Specifically, the amendments will allow certain market participants to report under the U.S. Commodity Futures Trading Commission's (CFTC) swap data reporting rules. They will also allow the use of the International Swaps and Derivatives Association (ISDA) Canadian methodology to help determine the reporting counterparty for a derivatives transaction and avoid double reporting.

The proposed amendments are not deemed material to the new trade reporting rule, so they are not being published for comment. The OSC indicates in its notice that the changes grant an exemption or remove a restriction, and their introduction represents "a logical outgrowth of the consultation process and comments received on the proposed rules."

Instead of being issued for comment, the proposals have been sent to Minister of Finance for approval, and they are slated to come into force on Sept. 9. The first phase of derivatives counterparty reporting obligations takes effect on Oct. 31.

"One of the biggest challenges for securities regulators as we implement the G20 commitments is cross-border harmonization.  We take the challenge seriously and are pleased to announce that we recognize the CTFC's swap data reporting rule as equivalent to our rule," said Howard Wetston, chairman and CEO of the OSC.  "The recognition of a comparable regulatory rule is an important milestone that reflects a strong, collaborative effort in strengthening oversight of OTC derivatives at the international level."