AMF proposes derivatives regulatory framework

The Autorit des march financiers (AMF) is seeking comment on a proposed framework for the regulation of the derivatives market in Quebec.
The proposal contains suggested legislation and regulation as well as policy statements, an AMF release says.
A derivative is essentially a financial instrument traded on or off an exchange and used to hedge risk that involve the trading of rights and obligations based on an underlying product, but do not directly transfer property.
The proposal follows May 2006s discussion paper on the regulation of the market. The discussion paper generated numerous comments and observations, an AMF statement says, that have been taken into consideration for the proposed framework.
The approach adopted in the proposed framework consists of fostering the development of core principles in legislation and complementing the framework with regulatory provisions or policy statements, an AMF statement says.
In addition to providing the flexibility needed to respond promptly and adapt the framework to market changes, this approach allows various market participants to operate within the framework in a manner that is more in line with their business model, thereby sustaining an environment that is conducive to innovation and competition.
Following the consultation, the AMF intends to evaluate the comments generated and prepare recommendations for the Minister of Finance.
The Request for Comment, as well as the proposal documents, are available on the AMF website at www.lautorite.qc.ca.