The Canadian Securities Administrators (CSA) issued a consultation paper today outlining several securities regulatory proposals related to the Canadian nonbank sponsored ABCP market. This paper comes out of an ABCP working group set up to address regulatory issues relating to the current credit crisis.
Among the groups proposals is a regulatory framework that would be applied to credit rating agencies requiring compliance with the recently amended code of conduct established by the International Organization of Securities Commissions. The CSA is also considering requiring public disclosure of all information provided by an issuer that is used in rating an asset backed security.
The group also is proposing to amend the short-term debt exemption to make it unavailable for sales of ABS short-term debt including ABCP. This would require issuers who sell these products to do so with a prospectus, or under another exemption. Additionally the group is seeking to reduce the reliance on credit rating agencies in securities legislation and is currently reviewing specific issues regarding mutual fund investments in ABCP, the CSA said.