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Canadian Derivatives Markets

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28 October 2013

Abstract

The Canadian derivatives market is not considered one of the world’s leaders, but it is relatively well developed. The market exhibits good levels of electronic trading and has been one of the stronger performers.

In the report Canadian Derivatives Markets, Celent analyzes the exchange-traded and OTC derivatives markets in Canada, along with some recent regulations. Like many others, the Canadian market was affected by the global financial crisis, but it has been able to recover and grow. However, the past year has been difficult. This report discusses the performance of the various derivatives product categories against this backdrop.

TMX Montreal Exchange, the main derivatives player in Canada, is ranked 17th in the world, experiencing 3.8% growth in volume in 2012. This can be considered a good performance in a year in which 11 of the top 20 exchanges saw a decline in their traded volumes.

“The Canadian derivatives market has experienced an understated, but relatively stable performance since the financial crisis,” says Dr. Anshuman Jaswal, Senior Analyst with Celent’s Securities & Investments Group and author of the report. “It seems poised to take advantage of this showing in the coming years.”

The report begins with a discussion of the recent performance of derivatives product categories at the TMX Montreal Exchange. This is followed by an analysis of the OTC derivatives market for foreign exchange and interest rate derivatives products in Canada. The report also considers the maturity and sophistication of the market in terms of the share of electronic trading in overall volumes. Finally, it looks at the recent OTC derivatives regulations in Canada which pertain to participant registration, trade repositories, and product definition.