The OSC outlines the Reporting Counterparty hierarchy and what to do in cases of overlap
The OSC has provided a reporting counterparty hierarchy (sometimes referred to as a 'waterfall') in their most recent Unofficial Consolidation: OSC Companion Policy 91-507CP. Here is a simplification of the reporting counterparty hierarchy that covers most cases:
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DCOs
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Swap Dealers
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Counterparties
Delegated Reporting
In cases where both parties are at the same level, they'd technically both have a reporting obligation per the Rule. However, the OSC has suggested that in this case one party should delegate their obligation to the other to avoid duplication within the TR. Subsection 26(3) permits the delegation of all reporting obligations of a reporting counterparty. This includes reporting of initial creation data, life-cycle event data and valuation data. For example, some or all of the reporting obligations may be delegated to a third-party service provider. However, the reporting counterparty remains responsible for ensuring that the derivatives data is accurate and reported within the timeframes required under the Rule.
Relevant FAQs from OSC RULE 91-506 PRODUCT DETERMINATION and OSC RULE 91-507 TRADE REPOSITORIES AND DERIVATIVES DATA REPORTING Frequently Asked Questions
Can I be subject to a reporting obligation even if I am not registered as a dealer in Ontario? A: Yes, the reporting obligation applies to any person or company that is a reporting counterparty as determined under section 25 of 91-507, regardless of the person’s or company’s registration status.
Can I only delegate the reporting of the initial transaction (creation data) or can I also delegate other ongoing obligations? A: Reporting obligations include the obligation to report creation data, life cycle-event data and valuation data. A reporting counterparty may delegate all or any part of its reporting obligations under 91-507, but remains responsible for ensuring the timely and accurate reporting of all derivatives data required to be reported.