The Financial Services Regulatory Authority of Ontario (FSRA) has published a proposed Eligible Financial Contracts (EFC) Rule and opened a public consultation to define which contracts qualify as EFCs for the purposes of section 234.1 of the Credit Unions and Caisses Populaires Act, 2020, once that provision is proclaimed into force. The proposed rule is intended to provide counterparties with clarity during a resolution by specifying which contracts are treated as EFCs, supporting credit unions’ ability to continue hedging to manage risks. It is also designed to harmonize Ontario’s approach with the federal Eligible Financial Contract Regulations under the Canada Deposit Insurance Corporation Act to reduce inconsistencies for cross-jurisdictional counterparties, and to support the functioning of FSRA’s Chief Executive Officer’s enhanced resolution powers in the credit union sector. The consultation is open until December 19, 2025.
Financial Services Regulatory Authority of Ontario 2025-10-20
Financial Services Regulatory Authority of Ontario launches consultation on a rule defining eligible financial contracts for credit union resolution
The Financial Services Regulatory Authority of Ontario (FSRA) has proposed an Eligible Financial Contracts (EFC) Rule to define qualifying contracts under section 234.1 of the Credit Unions and Caisses Populaires Act, 2020. The rule aims to clarify counterparties during resolutions and align Ontario's approach with federal regulations to minimize cross-jurisdictional inconsistencies. It also supports the FSRA CEO's enhanced resolution powers in the credit union sector.