The Canadian Securities Administrators (CSA) released a statement on February 10, which indicated that it was seeking comments on a recently published paper on OTC Derivatives. The CSA has requested that market experts provide their input up until April 10.

The paper delineates the proposals of the CSA Derivatives Committee related to collateralization of OTC derivatives. The consultation paper pertains to customers that work with central clearingparties (CCPs) through clearing members.

The paper addresses how assets used as collateral by these market participants are segregated.

As international regulations will soon require that more derivatives be cleared through CCPs, the smooth functioning of these financial organizations is crucial to the stability for the derivatives market and protecting entities involved in trades.

"The CSA is committed to establishing a comprehensive framework for the regulation of OTC derivatives that serves the needs of market participants and is consistent with Canada's international commitments," Bill Rice, chair of the CSA as well as chair and chief executive officer of the Alberta Securities Commission, said in the statement.

A study recently published by Greyspark Partners indicated that requiring OTC derivatives to be cleared through CCPs would make the operations of market participants using the clearinghouses more uncertain, according to Risk Magazine.