Just over four months after the entry into force of the Trade Reporting Rule,(1) the Ontario Securities Commission (OSC) has released amendments to this rule that will delay the effective date of the reporting obligations for all counterparties and remove the 'fall-back' reporting mechanism that required Ontario non-dealer counterparties to monitor the transaction reporting of a foreign dealer reporting counterparty. These amendments, if approved by Ontario's minister of finance, will come into force July 2 2014.

As part of ongoing Canadian and international over-the-counter derivatives reform, the OSC enacted the Trade Reporting Rule on December 31 2013 to regulate and oversee trade repositories and mandate derivatives data reporting requirements by counterparties to derivatives transactions. At the same time, the OSC enacted OSC Rule 91-506, Derivatives: Product Determination, the purpose of which is to define the types of derivatives that will be subject to reporting requirements under the Trade Reporting Rule and to other relevant OSC rules governing derivatives once such rules are enacted.

The Canadian Securities Administrators recently announced that derivative trade reporting would be delayed to allow time for a trade repository to be recognised under the Trade Reporting Rule. On April 17 2014, the OSC released amendments to the Trade Reporting Rule designed to put these reporting delays into effect. As a result of the amendments, derivatives dealers and recognised or exempt clearing agencies will have to report prescribed data for derivatives transactions starting October 31 2014. All other reporting counterparties will now have to start reporting on June 30 2015. These delays are necessitated by the fact that no trade depository will be in a position to be designated within the original trade reporting timeframe – July 2 2014 for derivatives dealers and recognised or exempt clearing agencies and September 30 2014 for all other reporting counterparties. In light of these changes to the reporting obligation dates, corresponding changes are also made by the amendments to the reporting dates of pre-existing derivative transactions.

The Trade Reporting Rule has also become less burdensome to local counterparties, as the amendments repeal the 'fall-back' reporting mechanism that required Ontario non-dealer counterparties to monitor the transaction reporting of a foreign dealer reporting counterparty. This mechanism required that a local counterparty act as a reporting counterparty and fulfil the reporting counterparty duties under the Trade Reporting Rule where a foreign dealer reporting counterparty did not report a transaction or otherwise failed to fulfil its reporting obligations. The revocation of the 'fall-back' reporting mechanism was prompted by significant resource and technological difficulties faced by a number of Ontario non-dealer counterparties in having to develop systems to monitor their counterparties' reporting.

For further information on this topic please contact Carol E Derk or Michael Taylor at Borden Ladner Gervais LLP by telephone (+1 416 367 6000), fax (+1 416 367 6749) or email (cderk@blg.com or mtaylor@blg.com). The Borden Ladner Gervais website can be accessed at www.blg.com.

(1) OSC Rule 91-507, Trade Repositories and Derivatives Data Reporting