Information Required to Comply
HSBC will need to know your organization's LEI as well as in which, if any, Canadian provinces or territories you are considered a 'local counterparty'. The criteria that you must consider to determine your status as a 'local counterparty' includes, but is not limited to, your organization's place of incorporation, principal place of business, and location of head office. Your organization could be a 'local counterparty' in more than one Canadian province or territory.
1) The Legal Entity Identifier (LEI)
The LEI is a 20-character code used to identify entities or companies that enter into financial transactions such as trades in OTC derivatives. It is an initiative endorsed by the Group of 20 Finance Ministers and Central Bank Governors and administered by the Global LEI system (a group of global regulators). The LEI is used in other jurisdictions such as the US and Europe where similar trade reporting rules have already been implemented. LEIs can only be obtained from entities endorsed by the Global LEI System. The Global LEI system is not yet operational. However, in the meantime, you can request a pre-LEI code which will be identical to your LEI once the Global LEI system is operational.
The LEI (or pre-LEI) can be obtained online from an LEI provider, such as the Global Markets Entity Identifier (GMEI) Utility. LEI issuance could take several days or longer and currently costs USD $200 for initial registration and USD $100 for annual maintenance. The process and costs associated with obtaining LEIs will vary depending on the LEI provider. The Ontario Securities Commission (OSC) website has information on LEIs that your organization may find helpful..
2) The Canadian Representation Letter
The Canadian Representation Letter #1- Trade Reporting and Other Obligations (the “Canadian Representation Letter”), has been published by International Swaps and Derivatives Association, Inc. (ISDA). The letter contains standardized questions and representations about your organization in order for HSBC to determine in which provinces/territories you are considered a 'local counterparty', if any. In addition, the letter allows you to provide us with other information, such as your organization's LEI, consent to disclosure to regulators and trade repositories, and additional agreements with respect to reporting responsibility for derivatives dealers. ISDA has a dedicated website that provides resources such as webinars on how to complete the representation letter, summary documents on trade reporting requirements and Frequently Asked Questions (FAQ).The OSC has published a document containing Frequently Asked Questions (FAQ) that will provide additional guidance. Note: some of these materials (including the FAQs) were published in 2014 when reporting rules only impacted local counterparties in Manitoba, Québec and Ontario.
You can download the Canadian Representation Letter below and return your completed letter to HSBC at: CanadaTradeReportingemail@example.com:
Alternatively, you can submit the Canadian Representation Letter through Markit® ISDA Amend, an online service provided jointly by ISDA and Markit®, where the Canadian Representation Letter can be provided to multiple counterparties at once. ISDA Amend is free for the buy-side or end-users of derivatives. Below are the steps to submit it through Markit® ISDA Amend:
Below are the steps to submit it through Markit ISDA Amend:
- Obtain an LEI/Pre-LEI through GMEI or another LEI provider as outlined above.
- If you are not registered already, register for Markit® Counterparty Manager on Markit® ISDA Amend website.
- Once registered and provided a Markit® username and password, login to Markit® Counterparty Manager - ISDA Amend and apply to the Canadian Representation Letter.
- If you are completing the Canadian Representation Letter on Markit®, please ensure that you submit it to each HSBC entity with which you have a derivatives trading relationship.
|HSBC Bank Canada
|HSBC Bank PLC
|HSBC Bank USA, National Association
For additional help in completing the Canadian Representation Letter through Markit®, you can access a webinar under the "Webcasts" section of their site (note: this was published in 2014 when reporting rules only impacted local counterparties in Manitoba, Québec and Ontario). Please contact Markit® if you have any questions regarding the ISDA Amend tool:
Telephone: ISDA Amend Hotline US: + 1 212 488 4049
Please provide your completed Canadian Representation Letter via email or ISDA Amend as soon as possible but no later than July 29, 2016.
Should you have any questions, please do not hesitate to contact your HSBC account manager or email us at CanadaTradeReportingfirstname.lastname@example.org. We also encourage your organization to seek appropriate legal advice as to the Canadian Reporting Requirements that are applicable to you.