The Canadian Securities Administrators (the
"CSA") have unveiled new rules
addressing syndicated mortgages with the dual objectives of
establishing a more consistent framework across the country and
enhancing investor protecting through greater transparency. The new
rules are outlined in amendments to National Instrument 45 -106 -
Prospectus Exemptions and National Instrument 31 - 103
- Registration Requirements, Exemptions and Ongoing Registrant
Obligations (collectively, the "Proposed
Amendments").
A syndicated mortgage is a mortgage in which two or more private
persons participate, directly or indirectly, as lenders in a debt
obligation that is secured by a mortgage registered against title
to real property. The mortgage typically funds the initial stages
of a development project - consulting fees, zoning permits,
architecture costs, marketing and sales expenses - rather than the
actual construction of the project, which is what makes it a risky
investment.
