Securities regulators have granted TD Securities Inc. relief from prospectus and registration requirements for the over-the-counter derivatives it plans to develop to trade between sophisticated investors.

A TDSI subsidiary, TD Commodity & Energy Trading Inc., has received relief from registration and prospectus requirements for trades in OTC derivatives between it and certain sophisticated investors. In its decision, the OSC reports that the Calgary-based firm proposes to custom design, build and market a full range of commodity-related derivative products for its clients.

It notes that these derivatives may also include interest rate, foreign exchange, equity and credit-related components. TD will originate and market all of the derivatives. They will be designed on a case-by-case basis to fit the needs of the particular client, and will consist of one or more of an option, a forward contract, a swap or other contracts. The underlying interest of the OTC derivatives will consist entirely of a commodity, an interest rate, a foreign exchange rate, a security, an index, a benchmark or other variable, another OTC derivative, or some combination of these items.

The clients for these deals will have a high level of business and financial sophistication; who have access to their own in-house or external advisors who can assist in the determination of the suitability of the transaction; who regularly enter into OTC derivative trades in order to hedge or otherwise manage specific risks; and, be “Qualified Parties”, as defined in the decision.