U.S. derivatives regulators have given the Canadian banks a temporary reprieve from the obligation to file quarterly risk exposure reports, as regulators on both sides of the border continue to discuss these requirements.
The U.S. Commodity Futures Trading Commission (CFTC) issued a no-action letter today that provides relief to the Big Five Canadian banks that are registered with the CFTC as swap dealers. The relief means that the CFTC won’t bring enforcement action against the banks over the requirement to file quarterly risk exposure reports for any fiscal quarter ending on or before July 31.
The letter is in response to the request of the Canadian Bankers Association (CBA) on behalf of the banks. The CFTC notes that it is currently engaging with the banks’ primary regulator, the Office of the Superintendent of Financial Institutions (OSFI), on these quarterly risk reporting requirements.
“Those discussions are ongoing as to the level of detail and sufficiency of information required to be delivered in respect of quarterly risk exposure reports and the method of delivery,” it says. And, given that the final details have yet to be worked out, and that the banks would then need time to implement processes to meet those requirements, the CFTC has now granted relief.
Under the relief, the banks will have to provide their first quarterly risk reports to the CFTC for the fiscal quarter ending on October 31.