OSC Extends Investment Fund Repo Exemption to Support Liquidity During Crisis

The Ontario Securities Commission (OSC) has extended an exemption for investment funds to tap into the Bank of Canada's Contingent Term Repo Facility (CTRF). The exemption, which was set to expire on January 24, 2027, has been pushed back by 18 months to July 24, 2028. This means that investment funds will continue to have access to Canadian-dollar funding for up to 30 days in case of severe market-wide liquidity stress.

The OSC made the decision to extend the exemption in order to maintain a level playing field among provinces. The Bank of Canada built the CTRF to keep the financial system steady during times of crisis, and this extension will ensure that Ontario's investment funds have the same access to liquidity as those in other provinces.

The OSC has published a separate proposal aimed at making the relief permanent, rather than temporary. This proposal is still pending approval from Ontario's Minister of Finance. If approved, it would mean that investment funds would no longer be subject to the 18-month extension and could continue to rely on the CTRF as a liquidity backstop.