Breadth of the registrar’s role is the
key concern arising from the first outline of
Canada’s covered bond legislation. The proposal
aims to reflect market practice, leading some to query the need
for legislation at all.
The May 11 consultation paper, released by the
Department of Finance, raises the possibility of a
European-style registrar which would be responsible for
reviewing and certifying that transactions are legally
compliant, and be involved in the day-to-day decisions for bond
Such an influential market conduct role would be a
radical departure from the role of Canadian regulators, and
lawyers are hoping for more limited responsibilities.
"A regulator certifying to investors or
counterparties that transactions comply with legislation would
be a very unusual role – it is not really a role that
exists in relation to banks today," said Peter Hamilton, a
corporate and finance partner with Stikeman Elliott.
Aaron Palmer, a securities...