The Canadian Derivatives Clearing Corp. (CDCC) is proposing a series of changes to its rules as part of an initiative to modernize its approach to risk management and to meet international standards.
The proposed amendments to CDCC’s rules, risk manual and operations manual are being part of a broader effort to implement a new risk system, and to enhance the clearing company’s risk management processes and methodologies.
The proposals were approved by the CDCC board on Nov. 1, and the organization is now seeking regulatory approval.
The Ontario Securities Commission (OSC) published a notice outlining the CDCC’s proposed amendments on Thursday.
According to the notice, Toronto-based TMX Group Ltd., which owns the CDCC, launched an initiative in 2017 to modernize the technology used by its clearing platforms and their financial risk-management systems.
“The overall objective of this major project is to improve and enhance risk management by replacing aging technology, reducing the need for manual processes and strengthening the risk models used by CDCC in its day-to-day activities,” the CDCC says in the notice.
“The project is also expected to provide CDCC with greater flexibility in its clearing and risk- management systems, allowing such systems to better adjust to evolving clearing and risk standards and requirements.”
At the same time, the CDCC is also seeking to upgrade its risk management processes to bring them in line with recent guidance issued by global regulators and standards setters. Following the release of that guidance in July 2017, the CDCC carried out a self-assessment of its risk management processes, and developed a plan to bring its processes in better alignment with the global regulators’ guidance.
Now, it’s seeking to finalize rule changes designed to facilitate the completion of both of these projects.
The proposals are out for comment until Dec. 24.