Chapter 9: Introduction to Swaps

In this section

• Overview of the Swap Market
  Dive into the origins, key participants, and core mechanics of the global swap market, focusing on how these OTC derivatives are used for hedging, speculation, and risk management in Canada and beyond.
• What Is a Swap? Key Concepts, Examples, and Practical Considerations
  Explore the fundamental nature of swaps, including how they work, why they matter, and how market participants utilize them for managing risk and customizing exposure.
• Role of the Swap Dealer in Derivatives Markets
  A comprehensive exploration of how swap dealers function as market makers for swaps, manage counterparty risks, and operate within Canadian regulations under CIRO guidelines.
• History of Swaps
  A deep dive into the origins and development of the global swap market, from early currency and interest rate swaps to modern reforms and central clearing requirements.
• OTC Derivatives Market Reform: Global Regulations, Central Clearing & Canadian Framework
  Explore how OTC derivatives market reform reshaped global financial markets, focusing on central clearing, trade repositories, margin requirements, and Canada’s regulatory response through CIRO and CSA national instruments.
• CIRO/CSA Requirements for Swap Transactions (Trade Reporting, Clearing)
  Explore how swaps must be reported under Canadian regulatory frameworks, understand mandatory clearing obligations, and learn about CIRO’s operational guidelines for margin and capital requirements.
• Bilateral vs. Cleared Swaps
  Explore how bilateral and cleared swaps differ in terms of risk, regulation, customization, and practical usage, focusing on Canadian markets under CIRO guidelines.
• ESG & Sustainability-Linked Swaps
  Explore how sustainability performance metrics and ESG objectives shape emerging swap agreements in Canada's evolving regulatory environment.
• Cross-Border Swaps Considerations
  Explore the complexities of cross-border swaps, addressing extraterritorial regulations, clearing mandates, margin requirements, and global compliance considerations.