Harmonizing Financial Market Oversight Across Multiple Regulatory Frameworks

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M.D., 2024-12: Ministerial Order on the Amendment of the Derivatives Regulation amends the Derivatives Regulation under the Derivatives Act (chapter I-14.01), a legal framework governing the derivatives market in Québec. The order references several sections of the Derivatives Act, which empower the Autorité des marchés financiers (AMF), Québec’s financial markets authority, to issue regulations that oversee various aspects of the derivatives market.

The regulation primarily modifies Section 11.1 of the Derivatives Regulation. Key changes include the deletion of the phrase “3.11 to 3.13” and updates to specific cross-references, such as replacing “Part 11, sections 12.1” with “sections 11.1, 11.4,” and replacing “Part 13 and sections” with “sections 13.2 to 13.19.” Additionally, the regulation clarifies that certain derivatives activities are exempt from Regulation 93-101 respecting Derivatives: Business Conduct, which was approved by Ministerial Order No. I-14.01-2023-21 on December 5, 2023. This regulation outlines standards for the business conduct of derivatives dealers and advisers in Québec.

A new section, 11.1.1, is introduced to expand the scope of application for regulations concerning registration requirements. These include Regulation 31-102 respecting the National Registration Database, Regulation 31-103 respecting Registration Requirements, Exemptions, and Ongoing Registrant Obligations, and Regulation 33-109 respecting Registration Information. These regulations now apply to specific individuals engaged in derivatives activities that fall under the scope of Regulation 93-101. This addition ensures that registration requirements are harmonized across multiple regulatory frameworks, applying the necessary modifications to participants in the derivatives market.

The amendments aim to streamline and clarify the regulatory framework for derivatives in Québec, ensuring alignment with existing regulations, especially Regulation 93-101, which focuses on the business conduct of derivatives market participants. This alignment improves transparency, market integrity, and investor protection by holding derivatives dealers and advisers to a higher standard of conduct. The amended regulations ensure that key operational aspects such as registration, reporting, and compliance obligations for individuals and firms involved in derivatives trading are consistent with the evolving regulatory landscape. Regulations like 31-102, 31-103, and 33-109 are essential in maintaining a cohesive registration system for market participants. The addition of section 11.1.1 extends these regulatory obligations to individuals involved in derivatives activities under Regulation 93-101, thus ensuring a comprehensive regulatory structure.

These amendments are designed to improve market stability, protect investors, and ensure that market participants maintain high standards of conduct and registration compliance. This update reflects the government’s commitment to maintaining a strong regulatory environment as financial markets

Quebec (OC 1376-2024) September 18, 2024