CSA releases amended syndicated mortgage reforms for comment

By James Langton | March 15, 2019 | Last updated on March 15, 2019
2 min read
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The Canadian Securities Administrators (CSA) are proposing several changes to their planned reforms to syndicated mortgage regulation, according to a notice published Friday.

The new proposals reflect comments received on the CSA’s previous rule proposal, which was issued last March.

“We are moving forward with changes outlined in our initial consultation that will substantially harmonize a regulatory framework for syndicated mortgages and increase investor protections,” said Louis Morisset, CSA chair and president and CEO of the Autorité des marchés financiers (AMF).

“In light of the feedback received, we have also adjusted specific aspects of our proposals and are now seeking comment on these changes.”

The new CSA proposals set out registration and prospectus exemptions in several provinces and propose changes to the requirements for relying on the offering memorandum (OM) exemption. They also alter the planned timing of the reforms.

The CSA said that the various exemptions are being adopted on a local basis to provide consistency with local mortgage rules, but that they are “substantially harmonized.”

Additionally, regulators have decided that all of the proposed reforms should take effect at the same time, rather than following a staggered implementation plan, as originally proposed.

“The single effective date is intended to simplify the transition for market participants in jurisdictions where syndicated mortgages are currently exempt from those requirements,” it says.

Finally, the proposed changes to the OM exemption also aim to enhance the requirements in this area.

“Given the rapid change of the real estate market in some jurisdictions, the proposed revisions include a requirement that a property appraisal take place within six months before an appraisal is delivered to a purchaser. Staff are also proposing additional guidance regarding the identity of the issuer of a syndicated mortgage,” the regulators’ notice says.

The latest proposals are out for comment until May 14. The CSA expects the new requirements to take effect on Dec. 31, subject to provincial approval.

Read the CSA notice here.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.