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OSC says work ‘almost done’ on derivatives dealer conduct rules

New conduct standards for dealers in the derivatives markets are expected soon, Ontario regulators say.

Speaking at the Ontario Securities Commission’s (OSC) latest annual conference on Nov. 21, Kevin Fine, director of the OSC’s derivatives branch, suggested that the regulators are close to wrapping up their latest work on long-awaited dealer conduct rules.

Proposed conduct rules for the Canadian derivatives markets have their origin in the financial crisis, which revealed a lack of oversight and regulatory standards in global derivatives markets.

The Canadian Securities Administrators (CSA) published proposed derivatives dealer conduct rules in 2017 and did so again for a second comment period in June 2018, and also held a public consultation on its proposals last fall.

Since then, the regulators have been working to finalize their rules in response to these latest consultations.

“I’m happy to report that work is almost done,” Fine told the OSC’s conference.

The Investment Industry Regulatory Organization of Canada (IIROC) is preparing to revise its own derivatives-related rules to ensure that they are harmonized with the CSA’s planned requirements in this area.

In a notice published on Nov. 21, IIROC set out a series of proposed changes that aim to clarify its requirements, modernize its rules, harmonize the requirements for securities and derivatives (and for listed and over-the-counter derivatives), and ensure that its rules in this area are aligned with the CSA’s.

IIROC’s proposals are out for comment until Feb. 19, 2020. A second phase of this work will modernize IIROC’s rules when it comes to derivatives margin requirements.

Source: Advisor’s Edge