Canadian Securities Regulators Publish Temporary Exemptions For Derivatives Data Reporting Requirements

On October 31, 2024, the Canadian Securities Administrators (CSA) introduced temporary relief from certain derivative data reporting requirements under the Trade Reporting Rules identified below.

The relief is provided by way of a local blanket order in Ontario entitled Coordinated Blanket Order 96-932 Re Temporary exemptions from certain derivatives data reporting requirements (the “Blanket Order”), which became effective on October 31, 2024, and will expire on July 25, 2025. This Blanket Order is harmonized across Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Québec, Saskatchewan, and Yukon.

The temporary exemptions include: (i) an extension of reporting deadlines for creation data and life-cycle data for non-qualifying reporting counterparties across all CSA jurisdictions; (ii) an exemption from valuation data reporting for counterparties that are neither derivatives dealers nor recognized clearing agencies; (iii) an exemption for reporting commodity derivatives below a specified threshold in Ontario, Manitoba, and Québec; and (iv) an exemption for reporting transactions between affiliated entities in Ontario and Manitoba where neither party is a qualified reporting counterparty.

The trade reporting rules from which the relief is granted (the “Trade Reporting Rules”) are Ontario Securities Commission Rule 91-507 Trade Repositories and Derivatives Data Reporting, Manitoba Securities Commission Rule 91-507 Trade Repositories and Derivatives Data Reporting, Regulation 91-507 respecting Trade Repositories and Derivatives Data Reporting (Québec), as amended by Blanket Order n° 2015-PDG-0089 (“Quebec BO 2015 ”) and Multilateral Instrument 96-101 Trade Repositories and Derivatives Data Reporting applicable in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan, and Yukon (“MI Data Reporting”).

Background

The Trade Reporting Rules outline various reporting requirements for derivative data, including creation data, life-cycle data, valuation data, commodity derivatives and derivatives between affiliated parties, among others.

On July 25, 2024, the CSA published amendments (the “Amendments”) to the Trade Reporting Rules which will come into force on July 25, 2025, with the goal of reducing regulatory burdens for end-users. To allow end-users to immediately benefit from these reductions, the Blanket Order grants temporary exemptions from the Trade Reporting Rules for the period before the Amendments take effect.

Blanket Order Exemptions

The exemptions granted are as follows:

1. End-User Reporting of Creation Data
   Reporting counterparties that are not “qualified reporting counterparties” (as defined in the Amendments) are granted more time to report creation data, with reporting due by the end of the second business day following the transaction’s execution date. This exemption applies in all CSA jurisdictions.
2. End-User Reporting of Life-Cycle Event Data
   Reporting counterparties that are not “qualified reporting counterparties” (as defined in the Amendments) are granted more time to report life-cycle event data, which they must report no later than the end of the second business day following the day on which the life-cycle event occurred. This exemption applies in all CSA jurisdictions.
3. End-User Reporting of Valuation Data
   Reporting counterparties that are neither derivatives dealers nor recognized or exempt or reporting clearing agencies or reporting clearing houses (as defined in the Amendments), are exempted from reporting valuation data across all CSA jurisdictions.
4. End-user Reporting of Commodity Derivatives
   This exemption applies to local counterparties who are not “qualified reporting counterparties” (as defined in the Amendments), allowing them to forego reporting commodity derivatives below a specific notional threshold.
   
   The Trade Reporting Rules, with the exception of MI Data Reporting, originally exempted local counterparties from reporting derivatives data on commodity transactions, excluding cash or currency, if they were not derivatives dealers or clearing agencies and had an aggregate notional value under $500,000 across all outstanding transactions. The Amendments revise this threshold, now excluding counterparties based on an aggregate month-end gross notional amount of up to $250 million, according to the terms outlined in the Amendments.
   
   This exemption applies only in Ontario, Manitoba, and Québec because MI Data Reporting already provides similar relief for other provinces.
5. End-user Reporting of Derivatives Between Affiliated Entities
   Transactions between affiliated entities, where neither party is a qualified reporting counterparty, are exempted from reporting. The term “affiliated entity” includes certain partnerships and trusts, subject to the terms of the Amendments. This exemption is limited to Ontario and Manitoba as equivalent exclusions already exist in Quebec BO 2015 for Quebec and the MI Data Reporting for other provinces.

Together these exemptions aim to immediately reduce the regulatory burden on end-users.

For further information on these exemptions, please contact any member of our Structured Finance and Derivatives Group.