Securities regulators have appointed Ernst & Young Inc. to administer the return of almost $60 million to investors harmed by the collapse of the non-bank asset-backed commercial paper market.
The Ontario Securities Commission and the Investment Industry Regulatory Organization of Canada announced Thursday that they have appointed the firm to administer the distribution of approximately $59.875 million directly to investors who purchased ABCP from the five investment dealers who settled enforcement cases with the regulators in the wake of the failure of the market for non-bank ABCP in 2007.
They hope to distribute the funds directly to eligible investors in September, after the allocation is determined.
The biggest shares of the enforcement settlements came from bank-owned dealers, Scotia Capital Inc., which paid $28.95 million to IIROC, and CIBC/CIBC World Markets Inc., which paid $21.7 million to the OSC. Additionally, HSBC Bank of Canada also paid $5.925 million to the OSC, and Canaccord Financial Ltd. and Credential Securities Inc., paid $3.1 million, and $200,000, respectively, to IIROC.
The OSC and IIROC say they worked jointly to determine eligibility criteria for investors, based primarily on the facts set out in the settlement agreements with the dealers. Now, Ernst & Young will begin contacting potentially eligible investors by mail, spelling out the eligibility criteria to participate in the distribution. Investors will be required to submit a completed participation form to the firm by June 30.