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Bank of Canada to allow global derivatives clearing

TORONTO, Oct 1 (Reuters) - Canada will allow its market players to use either a global or local central counterparty (CCPs) to clear standardized over-the-counter derivatives, its central bank said on Monday.

Central counterparties guarantee against default should one party in a contract, trade or investment be unable to pay. The Bank of Canada has been studying for more than a year whether to have traders use a domestic CCP or work with an offshore player.

(Reporting by Jeffrey Hodgson; Editing by James Dalgleish)

((jeffrey.hodgson@thomsonreuters.com)(+1 416 941 8099)(Reuters Messaging: jeffrey.hodgson.reuters.com@reuters.net))

Keywords: CANADA ECONOMY/DERIVATIVES