Court approves plan to return $60 million to ABCP investors

James Langton Securities regulators have received court approval for their plan to return almost $60 million in settlement funds to investors harmed by the collapse of the ABCP market in late 2007. The Ontario Securities Commission and the Investment Industry Regulatory Organization of Canada announced Tuesday that they have received confirmation from the Superior Court of Justice of Ontario for their proposed plan to distribute funds to investors who purchased third-party asset-backed commercial paper before the market failed. They collected $59.9 million from five investment dealers as part of enforcement settlements with the firms. Related news The regulators sought confirmation from the court that an earlier court order, which facilitated the restructuring of the ABCP market back in June 2008, does not prevent them from distributing the money they received from the investment dealers back to investors. OSC, IIROC seek court approval to distribute ABCP fine proceeds The initial order included provisions designed to protect the firms involved in the restructuring from liability, but it also allowed the OSC and IIROC to investigate and pursue proceedings against the firms, as long as they didn’t make any order requiring restitution or damages to aggrieved investors. The regulators wanted to be sure that this didn’t prevent them from paying out the settlement funds. Under those settlements, CIBC/CIBC World Markets Inc. and HSBC Bank of Canada agreed to pay $21.7 million and $5.925 million, respectively, to the OSC. And, Scotia Capital Inc., Canaccord Financial Ltd. and Credential Securities Inc. agreed to pay $28.95 million, $3.1 million and $200,000, respectively, to IIROC. The regulators have been holding those settlement funds in segregated accounts since those sanctions were paid. Details of the regulators’ distribution plan will be announced and posted on their web sites “in the near future”, they said. New U.S. rule a significant step to reforming ABS market: White FINRA brings transparency to asset-backed securities market Basel Committee revising capital rules for securitization Share this article and your comments with peers on social media Keywords Asset-backed securities and commercial paperCompanies Investment Industry Regulatory Organization of Canada, Ontario Securities Commission Facebook LinkedIn Twitter read more