OTC derivative trade reporting will commence on October 31st under regulations adopted in Quebec, Ontario, and Manitoba. Among others, market participants that will be affected by this trade reporting deadline include U.S. persons that trade with certain Candian banks.
ISDA has developed what is referred to as a “Canadian Representation Letter,” in order to facilitate adherence to the trade reporting requirements by market participants and recently announced that ISDA Amend is available to make it easier for parties to exchange relevant representations with market counterparties. In summary, the representations are designed to allow parties to:
1) Understand one another’s nexus with Canada (i.e., a party’s status under the Canadian rules as a “local counterparty”);
2) Exchange legal entity identifiers (LEIs) – parties will need to obtain an LEI, unless they have already obtained one (including, for example, for purposes of U.S. Dodd-Frank reform compliance); and
2) Make a determination as to which party will be, or has the responsibility to act as, the party that reports the derivatives to a designated trade repository in Canada.
Unlike the experience with Dodd-Frank related changes, there is no protocol relating to the Canadian reporting requirements. End-users can use ISDA Amend at no cost.
Additional information from ISDA about the Canadian reporting requirements and related Representation Letter is available here.
Good day. Good reps. DR2