Subsequent to the 2008 financial crisis, the G20 leaders agreed on reforms to the regulation of over-the-counter (OTC) derivatives markets. One element of these reforms, agreed to at the Cannes Summit held in November 2011, was the development of margin standards for non- centrally cleared derivatives.1 The G20 leaders called on the Basel Committee on Banking Supervision and the International Organization for Securities Commission (jointly, BCBS- IOSCO) to develop these standards (BCBS-IOSCO Standards) that were published in March, 2015.
In February 2016 the Office of the Superintendent of Financial Institutions Canada (OSFI) published OSFI Guideline E-22 on Margin Requirement for Non-Centrally Cleared Derivatives (OSFI Guideline)3 applicable to federally regulated financial institutions (FRFIs). FRFIs subject to and complying with the OSFI Guideline4 would be relieved from the requirement to comply with the proposals in this consultation paper. Such FRFIs are included in the definition of “covered entity” for the purpose of defining the counterparties with which a covered entity that is not a FRFI would be required to exchange margin.
The full consultation paper is available at http://www.albertasecurities.com/Regulatory%20Instruments/5307636-v1-95-401_Margin_Consultation_Paper.PDF