Under OSFI Guideline E-22, Margin Requirements for Non-Centrally Cleared Derivatives, most Federally Regulated Financial Institutions (FRFIs) are subject to the mandatory exchange of variation margin beginning on March 1, 2017. On February 24, 2017, OSFI announced some limited relief from this deadline, citing the desirability of a globally harmonized implementation of the variation margin requirements in order to ensure a level playing field and a stable derivatives market for Canada.
For FRFIs transacting with counterparties that do not present a significant exposure to them, OSFI now expects those FRFIs to meet the variation margin requirements by no later than September 1, 2017. Investment funds and investment fund managers that have OTC derivatives agreements with FRFI counterparties (e.g., forward agreements, interest rate swaps, etc.) will therefore likely have a bit more time to complete and exchange the required documentation.