Securitisation reforms endanger Canada’s exempt market

Author: Danielle Myles | Published: 13 Oct 2011

Canadian regulators’ proposal for stricter securitisation standards similar to the US could close parts of the private market, industry participants have warned.

The protectionist reforms outlined in the national instrument, proposed by the Canadian Securities Administrators (CSA) earlier this year, include enhanced reporting and disclosure standards, and narrower authorised investor classes.

It’s one of the country’s most significant post-crisis regulatory proposals, but the barrage of industry feedback claims the plan is misguided and counterproductive.

The planned shake-up would impose onerous requirements on both registered and private (exempt) securitisation issuers. But it’s the exempt market that looks to suffer the most.

"A large majority of private placements of long-term securitised products are heavily negotiated deals between sophisticated parties," said Rick...