Canadian Securities Administrators Propose New Securitized Products Rules

The Canadian Securities Administrators (CSA) published a comprehensive set of proposed new rules with respect to securitized products in April 2011 (2011 Proposals), but in a notice dated January 23, 2014 the CSA indicated that they do not intend to proceed with the aspects of the 2011 Proposals relating to: (a) prospectus and continuous disclosure requirements; (b) restricting the prospectus-exempt distribution of securitized products to a class of highly-sophisticated investors; and (c) the prospectus-exempt distribution of securitized products with a maturity of one year or more. The rationale given by the CSA for this change of direction was based on their conclusion that Canadian securitization activity currently does not raise systemic risk or investor protection concerns that warrant the type of comprehensive regulatory intervention contemplated by the 2011 Proposals.