Under the proposed framework, reporting issuers would be required to provide investors with information on the features and risks of securitized products.
This information will be provided to investors at the time of product distribution and on an ongoing basis.
According to CSA, these new disclosure requirements have been designed to be consistent with international developments. In addition, non-reporting issuers that distribute securitized products in the exempt market will also be subject to certain initial and ongoing disclosure requirements, said CSA.
Bill Rice, chair of the CSA and chair and CEO of the Alberta Securities Commission said the proposed rules build on the CSA’s efforts to provide increased transparency to investors while taking into account the particular features of the Canadian securitization markets.
"We will work toward striking an appropriate balance between strong investor protection and an efficient, open marketplace," Rice said.
A key element of the proposed rules is the narrowing of the class of investors who can buy securitized products in the exempt market to a smaller, more sophisticated group.
This feature is intended to help investors avoid products whose risk profiles and underlying components may be unsuitable for their investment objectives.
