ESMA European Securities and Markets Authority : Signed MoU for Quebec, Ontario, Manitoba- Canada

56606552-7c04-418d-882b-4a1458ee4901.pdf

Memorandum of Understanding

* *

* * *

* esma

* * * * *

European Securities and Markets Authority

European Securities and Markets Authority ("ESMA") and

'

AUTO RITE

DES MAR CHES

FINANCIER S

Autorite des marches financiers ("AMF")

c=i r,...,"I ....._.... I E=i E=i I c=i r--..11

Manitoba Securities Commission ("MSC")

O N T A R I O S E C U R I T I E S C O M M IS S IO N

Ontario Securities Commission ("OSC")

Memorandum of Understanding Related to European Securities and Markets Authority's Monitoring of the Ongoing Compliance with Recognition Conditions by CCPs Established in Canada - Manitoba, Ontario and Quebec

In view of central counterparties ("CCPs") established and recognized in Manitoba, Ontario and Quebec having applied to the European Securities and Markets Authority ("ESMA") for recognition as CCPs, pursuant to Article 25 of EMIR (defined below), the Autorite des marches financiers of Quebec ("AMF"); the Manitoba Securities Commission ("MSC") and the Ontario Securities Commission ("OSC") (each, a "Local Authority" and collectively, the "Local Authorities") and ESMA have reached this Memorandum of Understanding ("MoU") regarding arrangements for cooperation related to ESMA's monitoring of the ongoing compliance by the Covered CCPs with the recognition conditions set out in Article 25 of EMIR (the "Recognition Conditions").

Under Article 25(6) of EMIR, the European Commission has adopted an Implementing Decision determining that the legal and supervisory arrangements of Manitoba, Ontario and Quebec ensure that Covered CCPs comply with legally binding requirements which are equivalent to the requirements of EMIR, that Covered CCPs are subject to effective supervision and enforcement in Manitoba, Ontario or Quebec on an ongoing basis, and that their legal framework provides for an effective equivalent system for the recognition of CCPs under the legal regimes of third countries.

Article 25(2)(c) of EMIR requires the establishment of cooperation arrangements as a precondition for ESMA to recognise CCPs established in Manitoba, Ontario or Quebec to provide clearing services to clearing members or trading venues established in the European Union.

Therefore, the purpose of this MoU is two-fold, namely to 1) ensure the fulfilment of the condition set out in Article 25(2)(c) of EMIR, i.e., that cooperation arrangements have been established as regards the Covered CCPs; and 2) express the Authorities' willingness to consult, cooperate and exchange information in the interest of fulfilling responsibilities and mandates of each Local Authority and ESMA in relation to the Covered CCPs.

This MoU is an arrangement between each Local Authority and ESMA and not a collective arrangement with other European Union authorities, nor between the Local Authorities outside of the context of this MOU. As such, it will not impact any arrangements which may be agreed directly between other European Union authorities and the Local Authorities, nor between the Local Authorities .

Article 1

Definitions

For the purpose of this MoU:

1. "Authority" means a signatory to this MoU or any successor thereto;

   
   

2. "Books and Records" means documents, electronic media, and books and records within the possession, custody and control of, and other information about, a Covered CCP;

   
   

   2

3. "Central counterparty or CCP" means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer;

   
   

4. "Covered CCP" means a CCP established in Canada and recognized either (i) as a clearing agency in the province of Ontario; or (ii) as a clearing house in the province of Quebec; or (iii) as a clearing agency in the province of Manitoba under The Securities Act or designated as a clearing house under The Commodity Futures Act, which has applied for recognition to, or where the context permits, has been recognized by, ESMA pursuant to Article 25 of EMIR;

   
   

5. "Emergency Situation" means the occurrence of an event that could materially impair the financial or operational condition of a Covered CCP;

f) "EMIR" means Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories;

1. "ESCB" means the European System of Central Banks;

   
   

2. "Governmental Entity" means:

   
   

   1. Ifthe Requesting Authority is a Local Authority:,

   
   

3. their respective provincial finance ministry and other provincial government agencies;

   
   

4. The Bank of Canada, the British Columbia Securities Commission or any other provincial or territorial securities or derivatives regulatory authority in Canada which, from time to time, becomes party to the Memorandum of Understanding Respecting the Oversight of Certain Clearing and Settlement Systems, dated March 19, 2014,1 as amended or supplemented from time to time; and




11. If the Requesting Authority is ESMA, the authorities identified in Article 25(3) of EMIR, namely,




1. the competent authority of a Member State in which the Covered CCP provides or intends to provide clearing services and which has been selected by the CCP;

   
   

2. the competent authorities responsible for the supervision of the clearing members of the CCP that are established in the three Member States of the European Union which make or are anticipated by the CCP to make the largest contributions to the default fund of the CCP referred to in Article 42 of EMIR on an aggregate basis over a one-year period;

   
   

3. the competent authorities responsible for the supervision of trading venues located in the European Union, served or to be served by the CCP;

   
   

   1 http:/ /lautorite.qc.ca/files/pdf/bourses-oar-chambres/protocole-entente-surveillance systemecompensation an.pdf

4. the competent authorities supervising CCPs established in the European Union with which interoperability arrangements have been established;

   
   

5. the relevant members of the ESCB of the Member States in which the CCP provides or intends to provide clearing services and the relevant members of the ESCB responsible for the oversight of the CCPs with which interoperability arrangements have been established ;

   
   

6. the central banks of issue of the most relevant European Union currencies of the financial instruments cleared or to be cleared;




i) "Implementing Decision" means Commission Implementing Decision (EU) 2015/2040 of13 November 2015.




j) "Laws and Regulations" means, in relation to ESMA, applicable European Union legislation within ESMA's scope of action as set out in Article 1(2) of Regulation (EU) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC and, in relation to Local Authorities, the Commodity Futures Act (Manitoba), the Securities Act (Manitoba), the Securities Act (Ontario), the Commodity Futures Act (Ontario), the Securities Act (Quebec), the Derivatives Act (Quebec), An Act respecting the Autorite des marches financiers (Quebec) and the rules, regulations, decisions, directions and orders adopted pursuant to them;




1. "On-site Inspection" means any regulatory visit by ESMA to the premises of a Covered CCP located in the Local Authorities' territory, including inspection of Books and Records;

   
   

2. "Person" includes a natural person, unincorporated association, partnership, trust, investment company or corporation and may be a Covered CCP;




1. "Requested Authority" means:

   
   

2. Where the Requesting Authority is ESMA, the Local Authority to whom a request is made under this MoU; or

   
   

   11. Where the Requesting Authority is a Local Authority, ESMA; and

   
   

3. "Requesting Authority" means the Authority making a request under this MoU.




Article 2




General provisions




1. Pursuant to the regime under EMIR for recognition of third-country CCPs, ESMA does not have direct supervision or enforcement powers over the Covered CCPs and relies on the