The B.C. Securities Commission has published advanced notice of adoption of a comprehensive regime for regulating the business conduct of dealers and advisers in the over-the-counter derivatives market, including a number of provisions that are specific to British Columbia.
For derivatives dealers and advisers, the framework establishes fundamental obligations that are aligned with international standards and include requirements related to fair dealing, conflicts of interest, suitability, reporting non-compliance, and record-keeping. The business conduct rule is intended to help protect market participants by improving transparency, increasing accountability, and promoting responsible business conduct in the derivatives market.
If approved by B.C.’s Minister of Finance, National Instrument 93-101 Derivatives: Business Conduct comes into force on September 28, 2024, and B.C. will join other Canadian securities regulators who published advanced notice of adoption in September 2023. With B.C.’s adoption of the Instrument and its related Companion Policy, the rule will become a National Instrument.
The instrument to be adopted by B.C. includes several provisions that were necessary due to differences between B.C.’s Securities Act’s and securities legislation in other provinces.
The business conduct rule was developed over an extensive three-stage consultation process that included a public roundtable to consider various regulatory, implementation, and compliance matters. In response to comments received during the most recent consultation, the final rule was streamlined to address potential negative impacts on derivatives market liquidity and to reduce implementation burden by better enabling firms to leverage their existing compliance systems.
