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CDS Clearing and Depository Services Inc. (CDS), Canada's national securities depository, clearing and settlement hub, today announced that the Ontario Securities Commission (OSC) has agreed to sponsor CDS towards endorsement as a Canadian Pre-Local Operating Unit ("Pre-LOU") under the Global Legal Entity Identifier System (GLEIS). By sponsoring CDS, the OSC has agreed to assist CDS with the endorsement process.
Global regulators have undertaken the Legal Entity Identifier (LEI) initiative to strengthen the world's financial system. CDS' role, once endorsed, will be that of a Pre-LOU in Canada. The Regulatory Oversight Committee (ROC), a committee of regulatory authorities from around the world, has assigned the four-digit prefix #9278 to CDS as a sponsored Pre-LOU in Canada.
The #9278 prefix will only become operational upon receipt of the ROC's endorsement of CDS as a Canadian Pre-LOU. Until that endorsement is received, CDS will direct entities wishing to register for an LEI from the CDS Securities Management Solutions Inc. website (www.cdssolutions.ca) to the Global Markets Entity Identifier (GMEI) utility registration portal, operated by the Depository Trust & Clearing Corporation (DTCC) in collaboration with SWIFT.
CDS Securities Management Solutions Inc. (CDS Solutions), an operating subsidiary of CDS, has entered into a strategic collaboration with DTCC. Once endorsed as a Pre-LOU by the ROC, CDS will offer Canadian entities LEI-issuance in collaboration with DTCC's GMEI utility. Until endorsement is received, entities are invited to visit the CDS Solutions website for more information on how to obtain an LEI.
"CDS is pleased to enter this partnership with the GMEI utility, the industry leading Pre-LOU, and looks forward to completing the Pre-LOU endorsement process with the guidance of the OSC", said Jean Desgagné, President and CEO of CDS. "This new role will allow us to expand the scope of CDS's service offerings to strengthen Canada's markets, enhance our international competitive position and enable regulators and customers to more effectively manage systemic and counterparty risk."
"DTCC and CDS have had a long history of working together, including operating the highest volume interface between central securities depositories", added William Hodash, Managing Director, DTCC. "Given the interconnectedness of the markets and our client base, collaborating on LEI and leveraging each other's capabilities and investments, is a natural evolution of our relationship."
The implementation of a Canadian Pre-LOU precedes the Canadian market's approaching October 31, 2014 deadline to begin reporting certain securities transactions to registered trade repositories using LEIs to identify all trade counterparties. This deadline follows the November 14, 2013, publication of OSC Rule 91-507 - Trade Repositories (TR) and Derivatives Data Reporting (DR). The Rule requires the use of an LEI to identify trade counterparties, the goal of which is to bring greater transparency to the OTC derivatives market and act as a precursor for future rules.
