FIA comments on proposed Canadian rule on customer clearing and collateral

19 April 2016

FIA filed a comment letter with Canadian regulators on Proposed National Instrument 94-102, which proposes new requirements for customer clearing and protection of collateral for OTC swaps positions.

FIA supports the principles underlying the proposed rule, namely the protection of customer positions and collateral. However, FIA is concerned that the new rule may result in overlapping, duplicative and unnecessarily burdensome regulatory requirements for futures commission merchants transacting with Canadian counterparties.

FIA's comments focus primarily on issues of interest to U.S. FCMs, particularly the issue of substituted compliance. U.S. FCMs are regulated by the CFTC, and subject to requirements under U.S. federal law that, although not identical in every respect, are not materially different to those set forth in the proposed rule. CFTC-regulated FCMs provide an equivalent level of protection to all of their customers, including their Canadian customers.  An accomodating substituted compliance regime would simplify implementation of the proposed rule and minimize costs and burdens for foreign providers of clearing services.

FIA's comments also address other issues addressed in the proposed rule, including portfolio and cross-margining, recordkeeping, reporting, and disclosure requirements.

The full comment letter is available in Resources on the right.

  • FIA
  • Clearing
  • Cross Border
  • Customer Protection \ Segregation