The Only Constant is Change: How New Canadian Regulations are Reshaping Ops & Tech Strategies in Financial Institutions

Trade and transaction reporting frameworks for financial organizations continue to undergo significant changes. Across the globe, since December 2022 three rewrites came into effect within 18 months. Additionally, we will see another set for the end of this month, two next month, and a further two rewrites are still poised for implementation over the next year or so. The most recent evolution in trade reporting rules to be confirmed is in Canada, with the Canadian Securities Administrators (CSA) announcing the implementation date for its regime updates as July 25, 2025.

Despite regulatory change—sometimes simply incremental, sometimes a complete overhaul—being a permanent fixture for financial services firms to grapple with, these evolutions do offer financial institutions opportunities to re-evaluate aspects of their Ops & Tech strategies. Regulatory reporting is a fundamental pillar of an Operations function, and a strategic reporting solution can offer much more than just ensuring compliance – operational efficiency, data quality intelligence, and peer benchmarking to name just a few. The name of the game is balancing the 4 C’s. . . cost, change, control, and capacity.

Key Changes in Canadian Trade Reporting Regulations & the Data Integration Challenge
The changes introduced within the CSA rewrite broadly align with other global reporting rewrites. Notably, the updated rules introduce new requirements around reporting of the Unique Product Identifier (UPI), harmonized Unique Transaction Identifier (UTI) generation, and a refined reporting hierarchy.

Reporting of UPI will now be required across all asset classes, along with more than 70 additional reportable fields. The CSA has taken this rewrite as an opportunity to align requirements with global standards and other major jurisdictions, noting within a response to comments that 97% of these reportable elements are either standardized critical data elements (CDEs), CFTC fields, or ESMA fields. While that is a positive direction of travel, it’s still the case that validation deviations are present between the CSA, CFTC, and ESMA. And therein lies the source of big headaches to arrive at high quality and compliant reporting in all jurisdictions. Although these changes do not yet establish ISO 20022 as the required reporting format, the CSA has confirmed its intention to follow the CFTC’s lead in adopting this standard in the future. Firms should take this opportunity to strategize for a swift and smooth transition to ISO 20022 in future.

The implementation of requirements around harmonized UTI generation also aligns with global standards for transaction identification. Additionally, the advent of an updated reporting hierarchy, which provides new distinctions between financial and non-financial derivatives dealers for transactions, will impact the determination of reporting counterparty for certain inter-dealer transactions.

The CSA changes, while aimed at improving regulatory oversight and global harmonization, may require significant adjustments to existing reporting systems and processes. Financial institutions must adapt their data ingestion, eligibility and validation rules, report generation, reconciliation, and management information to meet these new requirements efficiently and accurately.

The KOR & Droit Reporting Solution for Changes to CSA Reporting
The KOR & Droit solution provides firms with simple turnkey reporting that scales easily to manage the needs for firms of all sizes. KOR, with Droit’s capabilities embedded, allows firms to address every aspect of the above-mentioned delicate balance surrounding cost, change, control, and capacity, all while meeting compliance obligations.

The solution provides for comprehensive coverage of the CSA changes, specifically:

• Ability to leverage the extensive mapping effort implemented for the recent CFTC and ESMA field additions
• Transparent rules logic for transformations to meet validations across jurisdictions
• Built-in support for UPI across all asset classes
• Harmonized UTI generation
• Seamless adaptation to future changes, such as the implementation of ISO 20022 report format
• Capability to handle the updated reporting hierarchy to distinguish between financial and non-financial derivatives dealers

KOR uses advanced technology to enhance compliance and performance, while reducing risk through comprehensive data collection, validation, submission, reconciliation, and exception management. Droit’s Adept decision engine—now available within KOR—provides trusted and consensus-driven eligibility rulesets for reporting obligations to ensure completeness and accuracy.

Improved Process Efficiency
The implementation of a single integration point to KOR, plus a single set of mappings, significantly improves process efficiency. Firms are now able to fulfill their global reporting obligations, handling the jurisdiction-to-jurisdiction divergence in eligibility rules and reporting formats.
The same platform also handles change management, distilling a given regulatory update down to a clear set of changes to review and sign off, and a minimal new set of fields to map.

Powerful Reporting Tool to Navigate Regulatory Refits & Rewrites
Leveraging this powerful platform is an opportunity for firms to not only become compliant but also enhance their ability to gain valuable insights, address and resolve issues proactively, and maintain full visibility into data flow and lineage—crucial for efficient reporting and management.