On January 22, 2016, the Canadian securities regulatory authorities in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan and the Yukon (Participating Jurisdictions) adopted Multilateral Instrument 91-101Derivatives: Product Determination (Scope Rule) and Multilateral Instrument 96-101 Trade Repositories and Derivatives Data Reporting (TR Rule, and together with the Scope Rule, the Instruments). In addition, the Participating Jurisdictions implemented Companion Policy 91-101CP Derivatives: Product Determination(Scope Rule CP) and Companion Policy 96-101CP Trade Repositories and Derivatives Data Reporting (TR Rule CP).

As outlined in our May 2014 Blakes Bulletin: Overview of Canadian Derivatives Trading Reporting Obligations, Ontario, Quebec and Manitoba (Existing Jurisdictions) implemented derivatives trade reporting rules in 2014 (Existing Rules). With the implementation of the Instruments by the Participating Jurisdictions, requirements related to derivatives trade reporting and trade repositories will be in effect in all provinces and territories of Canada. 

The Instruments are closely based on and largely consistent with the Existing Rules. There are, however, a number of differences between the two sets of requirements. This bulletin summarizes the trade reporting requirements contained in the Instruments and highlights important differences from the Existing Rules that market participants will need to consider as part of their implementation effort.


Click here to view table.

We note that there is some uncertainty as to the deadline for reporting transactions entered into between May 1, 2016 and July 28, 2016 (and whether these transactions are in fact required to be reported). We expect that this uncertainty will be addressed by the regulators prior to the TR Rule coming into force.


The Scope Rule sets out the types of derivatives transactions that are subject to reporting requirements. Under the applicable provincial securities legislation of the Participating Jurisdictions, the definition of “derivative” is broad and in some cases includes products and instruments that have not traditionally been considered derivatives. The Scope Rule excludes certain classes of transactions and instruments from the reporting requirement, including, subject to the detailed provisions of the Scope Rule:

  • ​Exchange-traded futures and options
  • Spot FX transactions that are intended to be physically settled within two business days
  • Commodity derivatives transactions that are intended to be physically settled
  • Compensation products linked to the share price of an issuer or its affiliate
  • Deposit instruments issued by a bank, credit union or trust company
  • Gaming and insurance contracts regulated under Canadian or foreign regulatory regimes


The TR Rule generally requires the reporting of derivatives transactions involving a counterparty that is a “local counterparty” in a Participating Jurisdiction. As in the Existing Rules, a counterparty to a transaction is a local counterparty in a jurisdiction where the counterparty:

  • ​Is organized under the laws of the jurisdiction
  • Has its head office or principal place of business in the jurisdiction; or
  • Is an affiliate of a person or company that is organized under the laws of the jurisdiction or has its head office or principal place of business in the jurisdiction, and such affiliate of the counterparty is liable for all or substantially all of the liabilities of the counterparty

The TR Rule definition of “local counterparty” differs from the Existing Rules in how it treats derivatives dealers. Under the Existing Rules, a dealer must be registered as a derivatives dealer in a province to thereby be deemed to be a local counterparty. Under the TR Rule, merely engaging in the business of trading in derivatives in the jurisdiction (referred to as being a “deemed dealer”) will cause the dealer to be a local counterparty in the jurisdiction, though under the TR Rule, this fact does not itself trigger any reporting obligation.

As both the TR Rule and the Existing Rules require that a derivatives transaction report indicate all the jurisdictions of Canada in which the counterparties are considered local counterparties, reporting counterparties should be mindful of the broadened definition of local counterparty under the TR Rule if this divergence from the Existing Rules is not addressed before reporting commences.

End-Users that are not affiliated with derivatives dealers will not be required to report transactions entered into with affiliates until at least January 1, 2017. As discussed below, it is expected that the Participating Jurisdictions and the Existing Jurisdictions will introduce a revised permanent exemption for End-Users’ inter-affiliate transactions in 2016.


Where a derivatives transaction involves a local counterparty in a Participating Jurisdiction, thereby triggering reporting obligations in the jurisdiction, the TR Rule sets out a reporting hierarchy to determine which counterparty to the transaction is the “reporting counterparty” which is required to report the derivatives transaction in accordance with the TR Rule.

The reporting hierarchy is as follows:

  • ​If the derivatives transaction is cleared through a “reporting clearing agency”, the reporting clearing agency is the sole reporting counterparty
  • Otherwise, if the derivatives transaction is between a derivatives dealer and a counterparty that is not a derivatives dealer, the derivatives dealer is the sole reporting counterparty
  • Otherwise, if the counterparties have, at the time of the transaction, agreed in writing that one of them will be the reporting counterparty, the counterparty determined to be the reporting counterparty under the terms of the agreement is the sole reporting counterparty
  • In any other case, both counterparties to the derivatives transaction are reporting counterparties

For the purposes of the reporting hierarchy, a derivatives dealer is a person that is engaged in the business of trading in derivatives as principal or agent in the relevant jurisdiction, or holds itself out as being engaged in such business in the relevant jurisdiction (i.e., a deemed dealer). The determination of whether a person is a derivatives dealer does not depend on dealer registration status.

The non-reporting party has no obligations under the TR Rule other than to advise the reporting party if it notes any errors in trade reports (although there is no obligation to review such reports). Also, if a written agreement has been relied upon to allocate reporting responsibility, local counterparties must keep a record of this agreement for seven years after the relevant transaction expires or terminates.


Unlike the Existing Rules, the substituted compliance provision in the TR Rule makes a derivatives transaction eligible for substituted compliance where the derivatives transaction is only caught by the TR Rule because a counterparty is organized under the laws of a Participating Jurisdiction, but otherwise does not do business in such jurisdiction. In such a case, the reporting counterparty satisfies the reporting obligations under the TR Rule if the derivatives transaction is reported pursuant to the Existing Rules.

The TR Rule does not currently permit substituted compliance by reporting in compliance with the U.S. Commodity Futures Trading Commission, European Union or other foreign requirements. However, the TR Rule CP states that it is expected that the substituted compliance provision will be amended before reporting requirements come into effect to recognize substituted compliance in certain foreign jurisdictions.


The TR Rule requires the same types and contents of reports as apply under the Existing Rules. Please see our May 2014 Blakes Bulletin: Overview of Canadian Derivatives Trading Reporting Obligations.


The TR Rule provides that a local counterparty is not required to report commodity derivatives transactions (for commodities other than currencies) if:

  • ​The counterparties to the derivatives transaction are End-Users
  • The aggregate month-end gross notional amount under all outstanding commodity derivatives transactions of the local counterparty and its Canadian affiliates, excluding inter-affiliate derivatives transactions, did not exceed C$250-million in any calendar month in the preceding 12 months; and
  • The local counterparty did not agree to be the reporting counterparty under a written agreement

This exemption is far broader than the commodity derivative exemption under the Existing Rules, which provides that a local counterparty End-User that enters into a commodity derivative transaction is not required to report such a transaction where the local counterparty End-User has less than C$500,000 aggregate notional value under all its outstanding derivatives transactions.


The multilateral notice publishing the Instruments states that proposed amendments to the TR Rule are expected to be published in the near future, which will generally be consistent with the proposed amendments to the Existing Rules published for comment on November 5, 2015 (Proposed Amendments).

As originally proposed for comment, the Proposed Amendments address the following points:

  • End-User substituted compliance for transactions with foreign affiliates: Substituted compliance may be permitted if a local counterparty End-User enters into a derivatives transaction with its foreign affiliate and the derivatives transaction is required to be reported pursuant to the laws of a recognized foreign jurisdiction.
  • Exemption from the requirement to report for Canadian End-User inter-affiliate derivatives transactions: Transactions between affiliated End-User local counterparties that are not affiliated with derivatives dealers will be excluded from reporting requirements. However, this exemption will not be available for inter-affiliate transactions where one of the counterparties is not a local counterparty in any jurisdiction in Canada.
  • Requirement to obtain a legal entity identifier: The Proposed Amendments will require each local counterparty to a derivatives transaction that is required to be reported to obtain a legal entity identifier.
  • Changes to the transaction-level data required for public dissemination: The Proposed Amendments will modify the transaction-level data required to be publicly disseminated by trade repositories in the Existing Jurisdictions. Amongst other changes, transaction level data will be further anonymized through publication delays and the rounding and capping of notional amounts.