Notice of Commission Approval – Amendments to Swap Counterparty Margin Requirements – Investment Industry Regulatory Organization of Canada (IIROC)
The Ontario Securities Commission has approved proposed amendments to Dealer Member Rule subsections 100.2(j) and 100.2(k) and IIROC Rule section 5442 that would allow Dealer Members one business day grace period to collect additional collateral to cover any market value deficiency on swap transactions with Acceptable Counterparties and Regulated Entities (Amendments).
The main purpose of the Amendments is to address undue burden on Dealer Member capital by making IIROC Rules pertaining to margin grace period allowances more consistent and aligning with industry practice.
The Amendments were published for public comment on July 16, 2020 for a 30-day period. No comment letters were received. IIROC has made one non-material change by adding back the sentence regarding the counterparty to the interest rate swap / total performance swap agreement being considered the Dealer Member’s customer. This revision is shown blacklined in Attachment B of IIROC’s Notice of Approval / Implementation that can be found at www.osc.ca.
The Amendments to Dealer Member Rules subsections 100.2(j) and 100.2(k) will be effective on September 1, 2021 and IIROC Rule section 5442 will come into effect on December 31, 2021.
In addition, the Alberta Securities Commission; the Autorité des marchés financiers; the British Columbia Securities Commission; the Financial and Consumer Affairs Authority of Saskatchewan; the Financial and Consumer Services Commission of New Brunswick; the Manitoba Securities Commission; the Northwest Territories Office of the Superintendent of Securities; the Nova Scotia Securities Commission; the Nunavut Securities Office; the Office of the Superintendent of Securities, Service Newfoundland and Labrador; the Office of the Yukon Superintendent of Securities; and the Prince Edward Island Office of the Superintendent of Securities have approved or not objected to the Amendments.