CSA STAFF NOTICE 45-307 Regulatory Developments Regarding Securitization June 18, 2010 This Notice provides an update from Canadian Securities Administrators’ (CSA) staff on the development of regulatory proposals relating to securitized products, including asset-backed commercial paper (ABCP) and asset-backed securities. In the October 2008 CSA Consultation Paper 11-405 Securities Regulatory Proposals Stemming from the 2007-08 Credit Market Turmoil and its Effect on the ABCP Market in Canada (Consultation Paper), the CSA explored, among other things, securities regulatory proposals in connection with the sale of ABCP. Since that time, the CSA’s focus has broadened to encompass all securitized products and to consider their distribution both publicly under a prospectus and in the exempt market under exemptions from the prospectus and registration requirements. In developing our proposals, we are considering international regulatory and industry developments. These include the recommendations of the International Organization of Securities Commissions (IOSCO) entitled “Disclosure Principles for Public Offerings and Listings of Asset-Backed Securities”, IOSCO’s Technical Committee’s Task Force report entitled “Unregulated Financial Markets and Products – Final Report”, and the United States Securities and Exchange Commission’s (SEC) notice of proposed rule-making relating to asset-backed securities and other structured finance products. Exempt market CSA staff have been considering changes to the current approach to the issuance of securitized products in the exempt market. In addition to reconsidering the use of the short-term debt exemption for the distribution of ABCP, we have been considering whether to impose other conditions in connection with the exempt distribution of securitized products, including requiring disclosure. Prospectus distributions and continuous disclosure for reporting issuers Disclosure requirements under Canadian securities legislation for securitized products distributed by prospectus are comprehensive. In light of the IOSCO and SEC proposals, CSA staff are considering enhancements to these requirements. We are also considering proposals for more tailored continuous disclosure for reporting issuers that have distributed securitized products.
Proposed consultations Our proposals will be designed to address investor protection and market stability concerns, taking into consideration international developments, while recognizing the importance of the securitization markets. We appreciate that some of these proposals could be significant policy changes. To obtain market input on these issues, we plan to publish materials for comment in fall 2010. We also anticipate additional consultations with interested stakeholders on the scope of the proposals, their impact on investor protection and the implications for the securitization market. In addition to our securitization proposals, the CSA expects to publish proposals relating to regulation of credit rating organizations in summer 2010. Questions: In the interim, please refer your questions to any of: Naizam Kanji, Deputy Director, Denise Weeres, Senior Legal Counsel, Corporate Finance, Mergers & Acquisitions Corporate Finance Ontario Securities Commission Alberta Securities Commission (416) 593-8060 (403) 297-2930 nkanji@osc.gov.on.ca denise.weeres@asc.ca Winnie Sanjoto, Senior Legal Counsel, Tom Graham, Director, Corporate Finance Corporate Finance Branch Alberta Securities Commission Ontario Securities Commission (403) 297-5355 (416) 593-8119 tom.graham@asc.ca wsanjoto@osc.gov.on.ca Paul Hayward, Senior Legal Counsel, Asad Gul, Economic Analyst Corporate Finance Branch Alberta Securities Commission Ontario Securities Commission (403) 297-2414 (416) 593-3657 asad.gul@asc.ca phayward@osc.gov.on.ca Paul Redman, Principal Economist, Agnes Lau, Senior Adviser, Technical & Strategy & Operations Projects, Corporate Finance Ontario Securities Commission Alberta Securities Commission (416) 593-2396 (403) 297-8049 predman@osc.gov.on.ca agnes.lau@asc.ca Neeti Varma, Senior Accountant Rosetta Gagliardi, Senior Policy Adviser Corporate Finance Branch Autorité des marchés financiers Ontario Securities Commission (514) 395-0337, poste 4462 (416) 593-8067 rosetta.gagliardi@lautorite.qc.ca nvarma@osc.gov.on.ca 2
Raymond Chan, Senior Accountant Alexandra Lee, Senior Policy Adviser Investment Funds Branch Autorité des marchés financiers Ontario Securities Commission (514) 395-0337, poste 4465 (416) 593-8128 alexandra.lee@lautorite.qc.ca rchan@osc.gov.on.ca Darren McKall, Assistant Manager, Lucie J. Roy, Senior Policy Adviser Investment Funds Branch Autorité des marchés financiers Ontario Securities Commission (514) 395-0337, poste 4464 (416) 593-8118 lucie.roy@lautorite.qc.ca dmckall@osc.gov.on.ca Christina Wolf, Economist Chris Besko, Legal Counsel – Deputy Director British Columbia Securities Commission Manitoba Securities Commission (604) 899-6860 (204) 945-2561 cwolf@bcsc.bc.ca chris.besko@gov.mb.ca Nazma Lee, Senior Legal Counsel Susan Powell, Senior Legal Counsel Legal Services, Corporate Finance New Brunswick Securities Commission British Columbia Securities Commission (506) 643-7697 (604) 899-6867 susan.powell@nbsc-cvmnb.ca nlee@bcsc.bc.ca Gordon Smith, Senior Legal Counsel Shirley Lee, Director, Legal Services, Corporate Finance Policy and Market Regulation British Columbia Securities Commission Nova Scotia Securities Commission (604) 899-6656 (902) 424-5441 nlee@bcsc.bc.ca leesp@gov.ns.ca Larissa Streu, Senior Legal Counsel Dean Murison Corporate Finance Deputy Director, Legal & Registration British Columbia Securities Commission Saskatchewan Financial Services Commission (604) 899-6888 (306) 787-5879 lstreu@bcsc.bc.ca dean.murison@gov.sk.ca 3
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