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Specifically, the paper addresses the segregation of assets put forward as collateral for OTC derivatives transactions cleared through a central counterparty (CCP), by customers that access the CCP indirectly through clearing members. As Canadian and international regulators move forward with their G20 commitments that mandate the clearing of standardised OTC derivatives, the effective operation of CCPs becomes essential to enhancing market stability and strengthening market participant protection.
“The CSA (Canadian Securities Administrators) is committed to establishing a comprehensive framework for the regulation of OTC derivatives that serves the needs of market participants and is consistent with Canada’s international commitments”, said Bill Rice, chair of the CSA and chair and CEO of the Alberta Securities Commission. “The CSA Derivatives Committee has developed proposals for segregation and portability arrangements that aim to protect customer positions and related collateral in the event of a clearing member insolvency.”
Market participants are invited to submit their comments until April 10, 2012.