CSA Proposes Harmonized Repo Exemptions for Investment Funds to Access Bank of Canada Facilities

Key Takeaways

• The Canadian Securities Administrators (CSA) have published proposed amendments that would codify, on a harmonized basis, exemptions from certain repurchase transaction requirements for reporting issuer investment funds.
• The change is designed to let eligible funds access the Bank of Canada's Contingent Term Repo Facility (CTRF) and any future repo facilities during severe market-wide liquidity stress.
• Compliance teams should note the November 16, 2026 comment deadline and the separate Ontario relief timeline.

Deep Dive

The Canadian Securities Administrators (CSA) have published proposed amendments that would codify, on a harmonized basis, exemptions from certain repurchase transaction requirements for reporting issuer investment funds. The change is designed to let eligible funds access the Bank of Canada's Contingent Term Repo Facility (CTRF) and any future repo facilities during severe market-wide liquidity stress. Compliance teams should note the November 16, 2026 comment deadline and the separate Ontario relief timeline.

The CTRF is activated and deactivated at the Bank of Canada's discretion. It offers funding for terms of up to 30 days to eligible participants against securities issued or guaranteed by the Government of Canada or a provincial government. It is intended as a backstop for severe, market-wide liquidity stress rather than routine funding. The proposal also supports the International Monetary Fund's 2025 Financial Sector Assessment Program recommendations on market liquidity and system resilience, which signals continued regulatory focus on fund liquidity risk management.

Key timelines differ by jurisdiction. Blanket Order 81-930 remains in effect without an expiration date in all CSA jurisdictions other than Ontario. In Ontario, relief expires January 24, 2027, and, subject to required approvals, will be extended to July 24, 2028 through OSC Rule 81-931, which is published concurrently. The proposed amendments are expected to take effect on or before the expiration of OSC Rule 81-931. The comment period runs 60 days, closing November 16, 2026. Ontario-based funds should monitor the approval status of Rule 81-931 closely, since a gap in relief would remove their ability to use these facilities.

Recommended actions: (1) Identify in-scope funds and assess whether CTRF or future facility access would be a useful liquidity tool. (2) Review the full proposed amendments and decide whether to submit comments by November 16, 2026. (3) Track Ontario's approval of Rule 81-931 and calendar the January 24, 2027 and July 24, 2028 dates. (4) Update liquidity risk management frameworks, stress testing, contingency funding plans, and fund documentation or disclosure as appropriate. (5) Coordinate with legal, portfolio management, and custodians or counterparties on operational readiness and eligibility.

Risk implications are generally favorable, as the amendments reduce regulatory uncertainty and strengthen liquidity tools. Residual risks include regulatory-timing risk in Ontario, operational and eligibility risk if funds do not prepare in advance, and the possibility that final amendments differ from the proposal. Reliance on discretionary central bank facilities should also not replace sound baseline liquidity management.

Source: Ontario Securities Commission