Market participants and ISDA are preparing comment letters on two regulatory proposals that would give Canadian local governments jurisdiction over over-the-counter derivatives. Both are viewed as seeking greater control over retail sales of derivatives. Comments are due July 14 to an Ontario government committee and July 24 to the QuebecAutorité des Marchés Financiers.
Philip Henderson, partner at Stikeman Elliott in Toronto, said many people will object to the Quebec proposal because "It proposes a very wide definition of what is an OTC derivative," as well as of what is retail. The Ontario proposal to amend the Ontario Commodity Futures Act--which should be completed by September--cautions against using overly broad definitions but still is not as clear as many would like. "The market would benefit from, and the industry in general would undoubtedly welcome, additional certainty in this area," Henderson said, adding greater consistency with the federal regime also would be welcomed.
