On October 11, 2024, the Minister of Finance issued Order number 2024-15, which concerns amendments to Regulation 91-507. This regulation governs Trade Repositories and Derivatives Data Reporting under the Derivatives Act (Chapter I-14.01) and introduces several significant changes designed to improve regulatory clarity and operational efficiency within the derivatives market. The Derivatives Act grants the Autorité des marchés financiers (AMF) the authority to create regulations regarding derivatives.

The amended regulation includes numerous updates aimed at refining definitions, enhancing reporting requirements, and clarifying operational protocols for trade repositories. Notable changes encompass updates to terminology, such as revising the definition of “asset class” to refer to “category of the underlying interest of” rather than “asset category underlying,” and adding new definitions, including “collateral and margin data,” which pertains to data regarding collateral and margin posted as of the reporting date. Additionally, the term “derivative” is now consistently used instead of “transaction,” emphasizing the focus on derivative instruments.

The amendments also establish that recognized trade repositories must file an annual amendment to Form 91-507F1 for changes not covered by other specific subsections. They are required to develop clear rules for receiving derivatives data and ensuring efficient access for participants. Furthermore, recognized trade repositories must implement robust validation procedures, promptly notify reporting counterparties about the status of their reported derivatives data, and maintain records of all data that failed validation. The regulation emphasizes the necessity of risk management frameworks and clear organizational structures within trade repositories, requiring them to identify risk tolerance levels and ensure efficient access to services for participants.

Another significant change is the introduction of rigorous verification protocols for reporting counterparties, who must now ensure their reported derivatives data is accurate and free of errors. Specific timelines for these verifications vary according to the type of reporting counterparty. Moreover, a new provision mandates that trade repositories must not disclose the identity of counterparties in certain transactions executed anonymously on derivatives trading facilities, thereby enhancing participant privacy.

These amendments reflect a broader trend in financial regulation aimed at increasing transparency and oversight in derivatives trading. By refining definitions and clarifying reporting requirements, the regulation seeks to improve compliance among market participants and enhance the overall integrity of the derivatives market. The focus on robust validation and verification processes is particularly significant, as it aims to ensure that reported data is accurate and reliable, which is essential for effective risk management and regulatory oversight. Additionally, the emphasis on risk management frameworks within trade repositories aligns with global standards set by regulatory bodies, including the Financial Stability Board.

Quebec (MO 2024-13) October 23, 2024