The Canadian Securities Administrators (CSA) recently published CSA Notice 81-930 – Exemptions from Certain Repurchase Transactions Requirements for Investment Funds, a coordinated series of blanket orders granting exemptive relief to facilitate access to the Bank of Canada’s (the Bank) Contingent Term Repo Facility (CTRF) for eligible investment funds.
The Bank’s CTRF is designed to support the stability of the Canadian financial system and to counter future, severe market-wide liquidity stresses. The CTRF is activated and deactivated at the Bank’s discretion and offers Canadian-dollar funding for a term of up to 30 days to eligible participants against securities issued or guaranteed by the Government of Canada or a provincial government.
Investment funds with exposure to Canadian dollar money market and/or fixed income securities may need to access the CTRF to better manage their liquidity if there is a severe market-wide liquidity stress event.
The blanket orders remove restrictions that would have impeded eligible investment funds from being able to participate in the CTRF. The orders facilitate access to a potential liquidity risk management tool for eligible investment funds to proactively manage their liquidity during times of severe market conditions.
CSA Notice 81-930 – Exemptions from Certain Repurchase Transactions Requirements for Investment Funds is available for download from the websites of the participating jurisdictions of the Canadian Securities Administrators.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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