360T awaits key trading exemption from Canadian regulator

Time is almost running out for 360T’s new UK-based platform to receive a key trading venue exemption from the Ontario Securities Commission (OSC) that will enable banks to carry on using it for trading with Canadian clients. 

Canadian regulators require any platform that provides derivatives trading services – including FX swaps, forwards and non-deliverable forwards – to Canadian entities to be a “Canadian exchange”, as stated in the Ontario Securities Act. 

There is no mutual recognition legislation between the UK and Canada, meaning non-Canadian platforms are required to either register as an exchange or obtain a regulatory exemption from the OSC to facilitate trading for local firms.

Post-Brexit, trading venues could continue to service both European Union and UK firms on their EU multilateral trading facilities (MTFs) thanks to the UK’s temporary permission regime. But with this regime expiring at the end of 2023, trading venues have been forced to set up UK MTFs to facilitate trading with UK firms. 

FX Markets understands that 360T’s UK MTF, which launches on January 2, has applied to the OSC for a regulatory exemption from being a Canadian exchange but is still awaiting approval. Without it, banks – including UK-based trading hubs of Canadian banks – will not be able to use the platform to trade with Canadian counterparties such as corporates upon launch.

According to minutes from the Bank of Canada’s FX Committee meeting on November 7, it has until the end of the year to receive an exemption for Canadian firms to remain on the platform. 

A spokesperson for 360T declined to comment. A spokesperson for the OSC was “unable to confirm or comment on the existence, status or nature of any review or application”.

According to regulatory filings, Refinitiv’s UK-based FXall MTF received a regulatory exemption on December 13. Other UK-based platforms that have received exemptions include Currenex and FX Connect.