The Canadian Securities Administrators (CSA) last Thursday published for comment CSA Staff Notice 21-323 Proposal for Mandatory Post-Trade Transparency of Trades in Government Debt Securities, Expanded Transparency of Trades in Corporate Debt Securities and Proposed Amendments to National Instrument 21-101(the Proposed Amendments). The comment period will end on August 29, 2018.
If approved, the Proposed Amendments would introduce mandatory post-trade transparency requirements for government debt securities (Proposed Government Debt Framework) and expand transparency requirements for corporate debt securities (Expanded Corporate Debt Proposal). These amendments would also align the post-trade transparency regimes for government and corporate debt securities.
The Proposed Government Debt Framework, which would be established by the Proposed Amendments, was developed by the CSA with the assistance of a stakeholder group that included the Bank of Canada, the Department of Finance Canada, and the Investment Industry Regulatory Organization of Canada (IIROC). The Framework would see an Information Processor (IP) established for government debt securities and would set the requirements. The Proposed Amendments would require a person or company that executes trades in government debt securities to provide information regarding these trades to the IP. Under the proposal, dealers, interdealer bond brokers (IDBBs), marketplaces and Schedule I, II, and III banks would be required to report details of their government debt transactions to the IP.
In parallel, the Expanded Corporate Debt Proposal would extend the existing corporate debt transparency provisions to require a person or company that executes transactions in corporate debt securities to provide information regarding trades in these securities to an IP. This means that mandatory post-trade transparency of trades in corporate debt securities would apply to entities beyond dealers, marketplaces and IDBBs and would extend to Schedule I, II, and III banks.
The CSA is proposing that IIROC’s mandate as IP for corporate debt securities would be expanded to include government debt securities. CSA staff would continue to conduct oversight activities to ensure that IIROC complies with the requirements in NI 21-101 and the terms and conditions set by the regulatory authorities in each jurisdiction.
CSA Staff Notice and Request for Comment 21-323 Proposal for Mandatory Post-Trade Transparency of Trades in Government Debt Securities, Expanded Transparency of Trades in Corporate Debt Securities and Proposed Amendments to National Instrument 21-101 Marketplace Operation and Related Companion Policy available for download from the websites of participating jurisdictions.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.