Derivative trade reporting in Canada is a single-sided reporting regime that requires over-the-counter (OTC) derivatives across all asset classes to be reported. The derivatives reporting regulation applies to all ten provinces in Canada. The regulations in each province have been adapted due to the differences in securities laws them.
The reporting regulation requires all derivatives transactions involving a local counterparty to be reported to a designated trade repository (TR) or to the Commission. As Canadian reporting is unilateral, the Trade Repositories and Derivatives Data Reporting Rule (TR Rule) outlines a hierarchy for determining which counterparty will be required to report a transaction based on the counterparty to the transaction which is best suited to fulfil the reporting obligation.
Any derivatives transactions involving one or more local counterparties must be reported to a TR. The counterparty responsible for reporting is as follows:
(a) if the derivatives transaction is cleared through a ‘reporting clearing agency’, the reporting clearing agency will be the sole reporting counterparty;
(b) otherwise, if the derivatives transaction is between a derivatives dealer and a counterparty that is not a derivatives dealer, the derivatives dealer will be the sole reporting counterparty;
(c) otherwise, if the counterparties have, at the time of the transaction, agreed in writing that one of them will be the reporting counterparty, the counterparty determined to be the reporting counterparty under the terms of the agreement will be the sole reporting counterparty; and
d) in any other case, both counterparties to the transaction will be the reporting counterparties. The inclusion of a reporting hierarchy is intended to ensure that reporting is carried out by the counterparty who will be most capable of, and least burdened by, the requirement to report.
The TR Rules reporting hierarchy ensure that reporting is carried out by the counterparty who will be most capable of, and least burdened by, the requirement to report.
The TR Rules require three main types of trade data to be reported:
creation data (including specific terms relating to the derivative);
life-cycle event data (including any change to derivatives data previously reported); and
valuation data (including the current value of the transaction).
Appendix A to the TR Rules provides specific details on the data fields that a reporting counterparty must report.
All Canadian OTC derivatives trades are to be reported to a recognised TR.
Reporting must be completed no later than the end of the next business day following the day that the transaction was entered into.
The TR Rule provides certain exclusions from the requirement to report derivatives data. These are:
A local counterparty is defined by the TR Rule as a counterparty that has either:
TRAction can provide you with delegated reporting solutions in accordance with the reporting requirements outlined above. We help you understand your Canada trade reporting obligations and simplify your reporting process.
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