The OSC announced the anticipated further amendments to OSC Rule 91-507 Trade Repositories and Derivatives Data Reporting (the TR Rule) to incorporate reporting in accordance with the Canadian Transaction Reporting Requirements issued by ISDA April 4, 2014 where transactions are between two dealers or two non-dealers, thus avoiding (hopefully) double reporting. In order to rely on the ISDA methodology: (i) each party to the transaction must agree to a multilateral agreement administered by and delivered to IDSA and under which the process set out in the ISDA methodology is required to be followed; (ii) the ISDA methodology process must be followed in determining the reporting counterparty in respect of that transaction; and (iii) each party to the transaction must consent to the release to the OSC by ISDA of information relevant in determining the applicability of the first two conditions.
As we discussed in April, amendments were also recently announced to delay the effective date of reporting obligations under the rule and to lessen the burden on local end-user counterparties.
The amendments announced today also designate the U.S. as a jurisdiction that will satisfy the substituted compliance condition in section 26(5) when reporting pursuant to CFTC data reporting rules. Recall that this substituted compliance rule only applies if the only local counterparty is a party that is a local counterparty because they are registered as a derivatives dealer in the jurisdiction (but are not otherwise located in the jurisdiction) or are an affiliate who liabilities are assumed by a party located in the jurisdiction.
In terms of data to be reported it amends the local counterparty identification data field to require market participants to specify the provinces in which the parties are local counterparties, thus facilitating the filing of one transaction report for multiple jurisdictions. In addition, a few fields that were not consistent with requirements in other jurisdictions were removed (ie. those labelled “Reporting counterparty derivatives dealer or non-derivatives dealer”, “Clearing timestamp: and “Valuation type”
Assuming Ministerial approval, these amendments will come into effect on September 9, 2014.