Regulation - LGIC
Proposed Regulation to prescribe the Ontario Electricity Financial Corporation, Ontario Infrastructure and Lands Corporation and Metrolinx for the purposes of paragraph 142(3)(d) of the Securities Act
Regulation Number(s):
REG2017.0091.e
Instrument Type:
Regulation - LGIC
Bill or Act:
Securities Act
Summary of Proposal:
Subsection 142(3) of the Securities Act exempts the Province, the Ontario Financing Authority (OFA) when acting as an agent of the Province, the federal government and any other province and territory (together, the "Crown") from certain Ontario Securities Commission (OSC) rules regulating derivatives transactions.
Subsection 142(3) exempts the Crown from, among other things, OSC rules relating to: registration requirements for persons or companies trading in derivatives; requirements in respect of disclosure documents for designated derivatives; requirements in respect of margin, collateral, capital, clearing and settlement; requirements in respect of trading on a recognized exchange; and transparency requirements relating to the public dissemination of transaction level data.
In December 2015, the Securities Act was amended to provide the Lieutenant Governor in Council with authority to prescribe Crown agents for the purpose of subsection 142(3) on the basis that the capital markets activities of certain Crown agents subject to OSC rules regulating derivatives transactions should benefit from the same exemptions provided to the Crown. The proposed regulation would prescribe the Ontario Electricity Financial Corporation (OEFC), Ontario Infrastructure and Lands Corporation (OILC) and Metrolinx for the purposes of paragraph 143(3)(d) the Act (the "prescribed Crown agents".)
The Lieutenant Governor in Council may prescribe conditions and restrictions relating to the exemption of Crown agents under paragraph 142(3)(d). Under the proposed regulation, the exemption would only apply to the prescribed Crown agents when they are acting as agents of the Crown, as both Metrolinx and OILC may declare in writing that they are not acting as a Crown agent for the purpose of an agreement, security or instrument pursuant to their governing legislation.
Subsection 142(3) exempts the Crown from, among other things, OSC rules relating to: registration requirements for persons or companies trading in derivatives; requirements in respect of disclosure documents for designated derivatives; requirements in respect of margin, collateral, capital, clearing and settlement; requirements in respect of trading on a recognized exchange; and transparency requirements relating to the public dissemination of transaction level data.
In December 2015, the Securities Act was amended to provide the Lieutenant Governor in Council with authority to prescribe Crown agents for the purpose of subsection 142(3) on the basis that the capital markets activities of certain Crown agents subject to OSC rules regulating derivatives transactions should benefit from the same exemptions provided to the Crown. The proposed regulation would prescribe the Ontario Electricity Financial Corporation (OEFC), Ontario Infrastructure and Lands Corporation (OILC) and Metrolinx for the purposes of paragraph 143(3)(d) the Act (the "prescribed Crown agents".)
The Lieutenant Governor in Council may prescribe conditions and restrictions relating to the exemption of Crown agents under paragraph 142(3)(d). Under the proposed regulation, the exemption would only apply to the prescribed Crown agents when they are acting as agents of the Crown, as both Metrolinx and OILC may declare in writing that they are not acting as a Crown agent for the purpose of an agreement, security or instrument pursuant to their governing legislation.
Further Information:
CONSULTATION DRAFT- Securities Act regulation (Derivatives)
Proposal Number:
17-MOF007
Posting Date:
May 11, 2017
Comments Due Date:
June 26, 2017
Contact Address:
Dean Hwang
Ontario Financing Authority
1 Dundas Street West
Suite 1400
Toronto ON M7A 1Y7
(416) 325-8000
documentation@ofina.on.ca
Ontario Financing Authority
1 Dundas Street West
Suite 1400
Toronto ON M7A 1Y7
(416) 325-8000
documentation@ofina.on.ca