TORONTO, Dec 21 (Reuters) - Canadian Imperial Bank of Commerce and its capital markets arm agreed to pay C$21.7 million in a settlement with regulators related to the sale of asset-backed commercial paper that was frozen as a side effect of the U.S. subprime credit crisis.
During an Ontario Securities Commission hearing on Monday, HSBC Bank Canada agreed to pay C$5.925 million, the OSC said.
Separately, the Investment Industry Regulatory Organization of Canada (IIROC), a national self-regulatory organization, is reviewing similar settlements with brokerages Credential Securities Inc, Scotia Capital Inc and Canaccord Financial Ltd.
In each case the banks or brokerages are accused of failing to take appropriate steps to protect the interests of their clients by selling them asset-backed commercial paper, which had been viewed as a relatively risk-free investment.
In the OSC ruling on Monday, both HSBC and CIBC agreed to submit to a review of compliance practice and procedures.
The ABCP market collapsed in August 2007 on fears about how much it was exposed to securities backed by subprime mortgages. That left investors unable to redeem some C$32 billion ($30.2 billion) of the paper.
($1=$1.06 Canadian)
(Reporting by Pav Jordan and Jennifer Kwan)
((pav.jordan@thomsonreuters.com; +1 416 941 8159; Reuters Messaging:andrea.hopkins.reuters.com@reuters.net). Keywords: CANADA ABCP
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
During an Ontario Securities Commission hearing on Monday, HSBC Bank Canada agreed to pay C$5.925 million, the OSC said.
Separately, the Investment Industry Regulatory Organization of Canada (IIROC), a national self-regulatory organization, is reviewing similar settlements with brokerages Credential Securities Inc, Scotia Capital Inc and Canaccord Financial Ltd.
In each case the banks or brokerages are accused of failing to take appropriate steps to protect the interests of their clients by selling them asset-backed commercial paper, which had been viewed as a relatively risk-free investment.
In the OSC ruling on Monday, both HSBC and CIBC agreed to submit to a review of compliance practice and procedures.
The ABCP market collapsed in August 2007 on fears about how much it was exposed to securities backed by subprime mortgages. That left investors unable to redeem some C$32 billion ($30.2 billion) of the paper.
($1=$1.06 Canadian)
(Reporting by Pav Jordan and Jennifer Kwan)
((pav.jordan@thomsonreuters.com; +1 416 941 8159; Reuters Messaging:andrea.hopkins.reuters.com@reuters.net). Keywords: CANADA ABCP
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.