Canadian financial industry policymakers have issued a statement indicating that they continue to support, and will work towards, central counterparty clearing for over-the-counter (OTC) derivatives.

In a joint statement from the Bank of Canada, the Canadian Securities Administrators (CSA), the Office of the Superintendent of Financial Institutions (OSFI), and the federal Department of Finance issued Monday, the authorities maintain that they are “committed” to clearing standardized OTC derivative contracts through central counterparties (CCPs).

The push for mandatory CCP clearing is one of the reforms agreed by the G20 in the wake of the global financial crisis, as they aim to improve transparency, mitigate systemic risk, and protect against abuse in that market.

The Canadian policymakers, which have been co-ordinating efforts to reform oversight of the OTC derivatives market, said Monday that Canadian firms can respect this pledge by clearing OTC derivatives using any CCP recognized by Canadian authorities, including global CCPs.

“Canadian authorities judge that global CCPs will provide a safe, robust and resilient environment for clearing OTC derivatives,” they say, as long at they comply with principles published by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO), earlier this year.

And, provided that they also adhere to four safeguards identified by the Financial Stability Board (FSB): ensuring fair and open access to market participants; co-operative oversight arrangements for CCPs between relevant authorities; resolution and recovery regimes that aim to ensure the core functions of CCPs are maintained during times of crisis; and, appropriate emergency liquidity arrangements for CCPs in currencies in which they clear.

The Bank, CSA, OSFI and Finance say they are “satisfied with the direction and pace” of international efforts on the four FSB safeguards, and say they will continue to work with authorities in other jurisdictions to achieve those safeguards at global CCPs.