Alberta Issues New OTC Derivatives Blanket Order
Harold Andersen and Kerri Howard
On April 11, 2008, the Alberta Securities Commission (ASC) issued Blanket Order 91-503, "Over-The-Counter Derivatives Transactions and Commodity Contracts". BO 91-503 replaced the previous Blanket Order 91-502 with effect from March 31, 2008.
The ASC found that the use of clearing agencies has become increasingly more prevalent with respect to the clearing of OTC derivative transactions since BO 91-502 was issued in August 2000. The fact that BO 91-502 could not be relied upon to provide an exemption to the prospectus and registration requirements of Alberta's Securities Act for OTC derivative transactions cleared through the facilities of a clearing agency was therefore an increasing problem for the industry. ("Clearing agency" is defined in the Securities Act as an entity that acts as an intermediary in paying funds or delivering securities (or both), that provides centralized facilities through which trades in securities or exchange contracts are cleared, or that provides centralized facilities as a depository of securities).
