Securities regulators announce final changes to syndicated mortgage regime

The Canadian Securities Administrators has released the final amendments to its syndicated mortgage regime, which will take effect on Mar. 1, 2021.

The Canadian Securities Administrators chose this date to afford stakeholders enough time to implement the amendments considering the COVID-19 pandemic.

Louis Morisset, chairperson of the Canadian Securities Administrators and president and chief executive officer of the Autorité des marchés financiers, said that the changes would improve the ability of investors to make informed decisions and would assist registrants who distribute such products in complying with their obligations. Investors will also be able to benefit from the protections connected with the involvement of a registrant in the distribution in all jurisdictions.

The amendments will substantially harmonize the relevant regulatory framework by eliminating the prospectus and registration exemptions currently in place in certain jurisdictions, will improve investor disclosure by adding requirements to the offering memorandum prospectus exemption when the exemption is being used to distribute syndicated mortgages and will exclude syndicated mortgages from the private issuer exemption.

These changes will affect the following issuances: National Instrument 45-106 Prospectus Exemptions (NI 45-106); National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103); Companion Policy 45-106CP Prospectus Exemptions (45-106CP); and Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations.

The Canadian Securities Administrators first published the proposed changes in 2018 then held two different comment periods on Mar. 8, 2018 and on Mar. 15, 2019. The 2018 proposal received 26 feedback letters, while the 2019 proposal received 11 feedback letters.