In a time of new regulatory scrutiny, more stringent compliance requirements and increased commercial uncertainty, clients that trade derivatives in Canada look to Osler for advice on the most effective ways of doing business. Both the pace of change and the complexity of the disparate rules – which can vary by jurisdiction and industry – have created a challenging landscape that requires considerable insight and expert regulatory, tax and commercial advice to navigate successfully.
Our clients include derivatives dealers, purchasers, exchanges, clearing agencies and other market participants. We provide Canadian and foreign-based firms with the strategic advice they need to ensure they’re complying with the rules, regulations and reporting requirements of Canada’s derivatives market. Our familiarity with Canadian regulators allows our team to provide efficient, practical advice when it comes to regulatory and tax compliance. In addition, our lawyers help to shape Canadian derivatives legislation and policy through our work with individual clients, industry associations, and government departments and agencies.
We have considerable experience advising on securities law issues, including those that relate to derivatives transactions. For example, we offer guidance on securities regulatory compliance matters, including dealer and adviser registration, market conduct rules, insider reporting and trading, investment fund rules and derivatives trade reporting. Our team also assists clients with the negotiation of investment management agreements, futures trading agreements, ISDA documentation for derivatives transactions and leveraged investing arrangements.
We advise on a wide range of tax aspects related to derivative transactions, including the use of derivatives as hedging instruments, as a substitute for direct investment, and in the context of complex trades and financings by taxable and tax-exempt entities situated in Canada and elsewhere. An in-depth knowledge of derivatives documentation permits our tax lawyers to provide efficient advice on the composition of tax representations and other tax clauses in standard form and bespoke agreements. In addition, we have extensive experience representing clients in tax disputes involving derivatives: throughout the audit process, and on appeal to all levels of court.
We have strong relationships with leading law firms in the United Kingdom, United States and other foreign jurisdictions. We collaborate with these firms to provide advice on derivatives legal issues arising in foreign jurisdictions in which clients engage in investment and trading activities.
DEALS & CASES
The Osler team has provided strategic advice on a broad range of derivatives-related matters. Our lawyers regularly advise both Canadian issuers and non-Canadian banks on negotiating derivatives arrangements (including within the ISDA Master Agreement framework and custom agreements). We also counsel Canadian banks on negotiating such arrangements within the context of syndicated financing transactions. We have experience advising Canadian funds on compliance with tax rules and regulatory requirements concerning derivatives arrangements and have acted for a number of Canadian public companies regarding balance sheet and other hedging arrangements.
In addition, our team has counselled several Canadian tax-exempt investors on using derivatives for fixed-income exposure and risk management. We leverage our considerable knowledge and experience to provide effective guidance to domestic and international intermediaries regarding the tax treatment of securities lending transactions with Canadian counterparties and over Canadian securities.
Our industry-leading expertise on regulatory issues in the derivatives area is extensive and clients turn to Osler for advice on their most business critical derivatives regulatory matters. For example, we have assisted Intercontinental Exchange with Canadian regulatory issues associated with its OTC derivatives and futures trading, clearing and reporting businesses. Our team also advised several U.S.-based swap execution facilities on obtaining the necessary regulatory approvals for operating in Canada.