Amendments to Ontario Securities Act proposed regarding Crown immunity from derivatives regulation

November 19, 2015

Proposed amendments to section 142(3) of the Securities Act Ontario provide that the rule-making power of the Ontario Securities Commission with respect to derivatives does not apply to derivatives traded by the federal, Ontario or other provincial Crowns. Nor will it apply to derivatives traded by agents of the Ontario Crown, if they are prescribed by the Lieutenant Governor in Council, although conditions may be imposed relating to the exception for such trades.  This immunity applies to rules mandating clearing of derivatives, registration requirements, trade data reporting, disclosure document requirements, trading requirements such as margin, collateral, clearing and settlement and capital, requirements that derivatives be traded on an exchange or alternative trading system and position limits.  However, the immunity does not extend to the power to impose record-keeping, reporting and transparency requirements.

The first reading of Bill 144, Budget Measures Act, 2015, took place on November 18, 2015.  The proposed amendments, which are set out in Schedule 18 of Bill 144, will come into force when the bill receives royal assent.

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