The Canadian Securities
Administrators yesterday issued a notice setting out the views of CSA
staff concerning the offering of structured notes
under the shelf prospectus system.
Structured (or linked) notes are specified derivatives whose
prices are determined by reference to the value of an underlying
interest unrelated to the issuer of the structured note. The CSA
regulates such notes through their review of prospectus
supplements, and yesterday's notice provides issuers with a
guide in respect of CSA staff's expectations while conducting
the review process.
Specifically, the notice, which updates and supplements earlier guidance on the
topic, sets out:
- the disclosure that issuers should
consider when preparing prospectus supplements for structured
notes, including in respect of the issuer's estimate of the
note's fair value and valuation model, hypothetical or
back-tested performance data (which CSA staff have generally
requested be removed), and
