Under the Canadian constitution, the 10 provinces and 3 territories in Canada are all separately responsible for securities and derivatives regulation in their respective provinces. On November 14, 2013, final versions of harmonized derivatives rules with respect to product determination, trade repositories and derivatives data reporting were simultaneous published by the Ontario Securities Commission, the Manitoba Securities Commission and the Autorité des marchés financiers (i.e., Quebec). The rules became effective on December 31, 2013.
The rules generally provide that all derivatives transactions existing on or after October 31, 2014 and involving at least one “local counterparty” in Ontario, Manitoba or Quebec, must be reported to a Canadian trade repository. The Canadian reporting requirements apply to a wide variety of OTC derivatives, including interest rate swaps, foreign exchange contracts, commodity contracts that hedge price risk, weather derivatives and other hedging contracts.
Derivatives involving at least one local counterparty are subject to reporting. A “local counterparty” is, at the time of the transaction: (a) a person or company organized under the laws of, or having its head office or principal place of business in the province; (b) an affiliate of (a) if responsible for its liabilities; and (c) parties required to registered under provincial securities law as a derivatives dealer.