Saskatchewan Regulation 1/2024, enacted under The Securities Act, 1988, introduces amendments to the Securities Commission’s regulations, specifically targeting Multilateral Instrument 25-102, which pertains to designated benchmarks and benchmark administrators. These changes respond to evolving market conditions and regulatory demands, with a strong emphasis on transparency, integrity, and governance in the administration of benchmarks, particularly within the commodities sector.

Officially titled The Securities Commission (Adoption of National Instruments) (MI 25-102) Amendment Regulations, 2023, this document encompasses amendments aimed at improving clarity and establishing a comprehensive framework for designated commodity benchmarks.

One of the key amendments includes the introduction of critical definitions to improve understanding. For instance, a “designated commodity benchmark” is now defined as a benchmark determined by an underlying interest that is a commodity other than currency. Additionally, the terms “front office” and “front office employee” are defined, clarifying their responsibilities concerning pricing and trading activities.

Compliance monitoring has also been addressed, with amendments made to Subsection 6.(3) that specify the compliance responsibilities of designated benchmark administrators. These administrators are now required to monitor adherence to securities legislation, particularly the accountability and control frameworks established within the regulations.

Furthermore, revisions to paragraph 39.(3)(e) emphasize conflict of interest identification and management procedures, ensuring that robust measures are implemented to prevent any potential conflicts that could undermine benchmark integrity. A new section, Part 8.1, explicitly addresses provisions related to designated commodity benchmarks, outlining specific regulations that do not apply to benchmark administrators concerning these benchmarks, thus facilitating a more tailored regulatory approach.

Significant emphasis is placed on establishing a control framework, where benchmark administrators must document and maintain procedures that ensure the integrity and reliability of commodity benchmarks. The methodologies for determining these benchmarks must accurately reflect their underlying values, ensuring verifiable accuracy and reliability.

The regulations also mandate designated benchmark administrators to publish comprehensive information regarding each benchmark determination. This includes detailed explanations of the determination process, the number of transactions, the volume of input data, and instances where expert judgment was utilized. Such transparency is intended to build trust and reliability in the benchmarks.

Saskatchewan (1/2024) January 27, 2024