Expanded definitions and updated compliance deadlines for eligible financial contracts at federal member institutions

Plain-language summary · AI-assisted · not legal advice

This amendment to the Canada Deposit Insurance Corporation Eligible Financial Contracts By-law makes three practical changes. First, two new defined terms—'central counterparty' and 'clearing and settlement system'—are added directly to the By-law, replacing a cross-reference to definitions in the Payment Clearing and Settlement Act. Second, the list of counterparties whose contractual termination rights are exempt from the prescribed class is expanded to include departments and agencies of foreign governments (previously just the foreign government itself) and multilateral development banks (banks owned and funded by two or more governments for economic development purposes). Third, the general compliance deadline for capturing eligible financial contracts entered into, amended, or renewed has been pushed back from October 1, 2024 to October 1, 2028, giving federal member institutions and their counterparties additional time to update contract language. Federal member institutions should review their eligible financial contract portfolios and counterparty relationships in light of the expanded exemption categories and the revised timeline.

Who this affects: federal member institutions · foreign government agencies and departments as contract counterparties · multilateral development banks · clearing and settlement system operators · financial contract compliance teams