CSA proposes derivatives data reporting reforms

The Canadian Securities Administrators (CSA) have proposed reforms designed to bring its over-the-counter (OTC) derivatives data-reporting requirements in line with international standards.

The CSA aims to harmonize its requirements with standards developed by the International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures.

“Global harmonization of data reporting standards will significantly reduce regulatory burden by enabling market participants to take a more consistent approach to compliance,” the CSA said in a notice outlining the proposed changes.

The revisions also are intended to provide regulators with higher quality, more consistent data on OTC derivatives markets — giving them greater oversight of emerging risks and market trends (such as liquidity, market fragmentation and price formation).

“The global harmonization of data reporting standards represents a significant milestone that would reduce regulatory burden for many market participants who report derivatives transactions around the world,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a release. “At the same time, improvements to data quality and consistency will enable us to more effectively identify risks and vulnerabilities to our financial markets and strengthen our ability to detect inappropriate activity that can harm investors.”

The proposals are out for an extended 120-day comment period until Oct. 7.

The CSA’s proposals come against the backdrop of a G20 initiative that was launched in the wake of the financial crisis to improve oversight of global markets.

In a joint report published today, the Financial Stability Board (FSB) and International Monetary Fund (IMF) said that policymakers have made “significant progress” at addressing the data gaps that were identified following the crisis — but that challenges remain in certain areas, including data on securities financings, securities statistics, international banking statistics and cross-border exposures, among others.

Additionally, the IMF announced plans for a new initiative to enhance data on climate change; household distribution; fintech and financial inclusion; and access to private sources of data, administrative data and data sharing. That plan will be submitted for approval to the G20 finance ministers and central bank governors later this year.

“Accurate and timely data are essential to assess economic and financial stability risks and to develop effective policy responses to address those risks. Such data are becoming more important as economies face greater uncertainties in a rapidly changing environment,” the FSB and IMF said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.