The Canadian Securities Administrators (CSA) recently published a staff notice describing the next steps in its plan to enhance the regulation of the fixed income market. CSA Staff Notice 21-317 Next Steps in Implementation of a Plan to enhance Regulation of the Fixed Income Market (CSA Staff Notice 21-317) describes the CSA’s efforts in respect of: (i) increasing post-trade transparency for corporate debt securities; and (ii) evaluating access to the fixed income market.

The CSA provided stakeholders with an opportunity to comment on its plan to enhance the regulation of the fixed income market in September 2015 in CSA Staff Notice 21-315 Next Steps in Regulation and Transparency of the Fixed Income Market.The CSA received a number of comments on its plan and those comments and a summary of next steps are now provided in CSA Staff Notice 21-317.

  1. Post-trade transparency for corporate debt. The CSA is planning to make the Investment Industry Regulatory Organization of Canada (IIROC) the information processor for corporate debt securities. Before the end of this year, post-trade information for certain designated debt securities and for retail trades in all other corporate debt securities will be reported to IIROC on a T+2 basis (subject to volume caps). In 2017, the CSA is planning to require post-trade reporting to IIROC of all trades in corporate debt securities on a T+2 basis (subject to volume caps). Certain information will be made available online, to the public. That information is described in Appendix B to CSA Staff Notice 21-317.
  2. Access to the fixed income market. CSA and IIROC staff are reviewing the practices of dealers in allocating new debt issues in order to determine if any regulatory action is required. The CSA has advised that they will seek feedback from buy-side participants to understand the challenges they face in accessing new issues of fixed income securities.

The CSA notes that they will inform stakeholders of next steps, including specific timelines for implementation of the transparency framework and its conclusions as to whether regulatory action will be taken to ease the challenges faced by smaller institutional investors in accessing new issues of debt securities.