Quebec’s securities regulator plans to use funds collected following the investigation into the Canadian asset-backed commercial paper (ABCP) market for the purpose of consumer education and investor protection, securities enforcement and crime prevention, the Autorité des marchés financiers said Wednesday.

On December 21, 2009, the AMF announced that it had reached settlements with National Bank Financial and Laurentian Bank Securities. The AMF maintained that these institutions failed to adequately respond to issues in the third party ABCP market, as they continued to buy and/or sell without engaging compliance and other appropriate processes for assessing the impact of such issues. Under the settlements, the AMF collected $72.8 million in administrative penalties.

The AMF will pay 50% of the penalties collected into the Education and Good Governance Fund (EGGF), which is dedicated to education and knowledge. The EGGF helps to educate consumers and protect investors, promote good governance, and enhance knowledge in all fields related to the AMF’s mission.

The regulator will use the remaining half of the penalties collected to develop new initiatives to enhance securities enforcement and prevent financial market offences. Its goal is to maximize the use of human and technological resources for financial market information and monitoring.

The AMF say it plans in particular to draw on the U.S. Securities and Exchange Commission as a basis for creating a team of financial market specialists dedicated to trends, the latest practices and new products.

The team, which will include economists, financial analysts and other specialists, will be mandated to assist and support the AMF staff assigned to investigations, inspections and securities markets.

IE