​New Securities Rules for ABCP Conduits Coming into Effect May 5, 2015

Canada's C$30-billion market for "asset-backed commercial paper" will soon be regulated by Canada's securities regulators (CSA) for the first time. The new rules published by the CSA (New Rules) are much less extensive than the CSA's initial 2011 proposals, which contemplated the comprehensive regulation of securitized products, and are milder than the CSA's more targeted 2014 rewrite (2014 Proposals).

As of May 5, 2015, issuers of a "securitized product" that is a negotiable promissory note or commercial paper maturing not more than one year from the issue date (ABCP) will no longer be able to sell such securities in reliance on the broad prospectus exemption available generally for commercial paper. Instead, a newly created prospectus exemption (ABCP Exemption) will permit a special purpose issuer (Conduit) to sell its ABCP if it: