Canadian regulator the Canadian Securities Administrators (CSA) has proposed conducting comprehensive surveillance and monitoring of OTC derivatives, obtaining the authority to enact robust market conduct rules for OTC derivatives and take enforcement action against any potential misconduct.
The proposals were included in a consultation paper on derivatives surveillance and enforcement, published last week, which is intended to improve regulatory oversight of OTC derivatives trading.
It is the second in a series of eight consultation papers to be published over the next few months that will build on regulatory proposals contained in the CSA document OTC Derivatives Regulation in Canada, which was published in November 2010. The previous consultation closed in September 2011.
The CSA is the council of Canada’s provincial securities regulators, co-ordinating and harmonising regulation for the nation’s capital markets.
“To improve the regulation of OTC derivatives markets, the G20 has emphasised the importance of transparency in these markets and their protection against abuse,” said Bill Rice, chair of the CSA and CEO of the Alberta Securities Commission. “To implement this phase of the G20 commitments, the CSA derivatives committee has developed proposals that would assist securities regulators in monitoring market participants and enforcing new standards of conduct that have been developed to deter abuses in these markets.”
Regulators around the world are currently introducing measures to reduce systemic risk in OTC derivatives markets – an area that the G20 nations have identified as key and targeted for reform by the end of 2012. The CSA paper is open for comment until 25 January 2012.