CANADA: CSA Establishes Regulatory Regime for Financial Benchmarks

Friday April 30 2021

On 29^th April 2021, the Canadian Securities Administrators (CSA) published a notice that the securities regulatory authorities of British Columbia, Alberta, Saskatchewan, Ontario, Québec, New Brunswick, and Nova Scotia have adopted final rules to establish a Canadian regulatory regime for financial benchmarks.

Currently, there are no formal securities regulatory requirements or oversight in Canada for benchmarks, and those that administer them, contribute data used to determine them or use them. The rules published provide a comprehensive regime for the designation and regulation of benchmarks, as well as persons or companies that administer them. Additionally, the rules provide a framework for the regulation of persons or companies that contribute data used to determine a designated benchmark.

In Canada, Refinitiv Benchmarks Services Limited (RBSL) is the administrator of the Canadian Dollar Offered Rate (CDOR), a domestically important interest rate benchmark. Upon implementation of the new rules, the CSA intends to designate only CDOR as a designated benchmark and RBSL as its administrator.

The CSA does not currently intend to designate the Canadian Overnight Repo Rate Average (CORRA) as a designated benchmark, as the Bank of Canada is its current benchmark administrator.

The CSA has no plans to designate other benchmarks or benchmark administrators immediately after the implementation of the rules. However, in the future, the CSA may determine it is in the public interest to designate other administrators and their associated benchmarks.

The CSA is seeking to have the new rules recognized as “equivalent” for purposes of the “third country regime” under the European Union’s (EU) benchmarks regulation.

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