Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Issuer of "pay-through" asset-backed securities previously granted an exemption from the requirements to file interim financial statements, subject to certain conditions. Issuer granted an exemption from the requirements in National Instrument 52-109 (NI 52-109) to file interim certificates, subject to certain conditions, including the requirement to file an alternative form of interim certificate and, in addition to complying with the annual certification requirement in NI 52-109, to also file an alternative form of annual certificate.

Applicable Legislative Provisions

National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

November 1, 2013

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(THE "JURISDICTION")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

CNH CAPITAL CANADA RECEIVABLES TRUST

(THE "FILER")

DECISION

Background

The principal regulator in the Jurisdiction has received a further application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption from the provisions of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) to file interim certificates (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Saskatchewan, Quebec, the Yukon, Northwest Territories and Nunavut.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions, MI 11-102, the Original Decision (as defined below) and the Previous Decision (as defined below) have the same meaning if used in this decision, unless otherwise defined.

Representations

The decision is based on the following facts represented by the Filer:

1. The Filer was established by The Canada Trust Company, pursuant to a declaration of trust made as of September 11, 2000, as supplemented by a supplemental declaration of trust made as of April 29, 2010 pursuant to which Computershare Trust Company of Canada (Computershare) succeeded The Canada Trust Company as the issuer trustee of the Filer (collectively, the Declaration of Trust), under the laws of the Province of Ontario.

2. The head office of the Filer is located in Toronto, Ontario.

3. The issuer trustee of the Filer is Computershare, whose registered and principal office is located in Toronto, Ontario. The head office of CNH Capital Canada Ltd. (CNH), the administrative agent of the Filer, is located, c/o CNH Capital America LLC, in Burr Ridge, Illinois.

4. The Filer is a reporting issuer, or the equivalent, in each of the provinces of Canada that provides for a reporting issuer regime.

5. The Filer is a "venture issuer" as defined in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102).

6. The Filer filed an alternative form of interim certificate for the six-month period ended June 30, 2013 in the form permitted pursuant to the Previous Decision, rather than an interim certificate in the form prescribed by NI 52-109.

7. The Filer is not in default of any of the requirements of the securities legislation of any jurisdiction, other than the obligation to file interim certificates for the six-month period ended June 30, 2013, in the form prescribed by NI 52-109.

8. The Filer engages solely in the following activities:

(a) acquiring, holding and managing financial assets acquired from CNH or affiliates of CNH and all related security with respect thereto, all collections with respect thereto, and all proceeds of the foregoing (collectively, the Purchased Assets);

(b) issuing asset-backed securities, obtaining loans and entering into hedging contracts and credit enhancement arrangements with respect to financial assets the Filer acquires or those securities and loans;

(c) making payments on the Filer's securities, loans, hedging agreements and credit enhancements; and

(d) engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

9. The Filer has no material assets or liabilities other than its rights and obligations arising in connection with the acquisition of the Purchased Assets and the issuance of asset-backed notes.

10. Pursuant to an MRRS decision document dated May 30, 2006 (the Original Decision), the Filer is exempted, on certain terms and conditions, from (i) the requirements of the securities legislation in the Jurisdictions concerning,inter alia, the preparation, filing and delivery of interim financial statements (the Interim Financial Statements), and (ii) the requirements in Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (which Multilateral Instrument was replaced by NI 52-109) to file interim certificates, which relief as to filing of interim certificates terminated on June 1, 2008.

11. Pursuant to a decision dated July 25, 2008 (the Previous Decision), the Filer is exempted, on certain terms and conditions, from the requirements in Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (which Multilateral Instrument was replaced by NI 52-109) to file interim certificates, which relief terminated on June 1, 2013.

12. The representations contained in the Original Decision and the Previous Decision remain true and accurate and are incorporated by reference into this decision document as representations of the Filer with the exception of:

(i) The Declaration of Trust (as defined in the Original Decision and the Previous Decision) was supplemented by a supplemental declaration of trust made as of April 29, 2010 pursuant to which Computershare succeeded The Canada Trust Company as the issuer trustee of the Filer;

(ii) The office of the issuer trustee at which it carries out its administrative functions as issuer trustee is 9th Floor, North Tower, 100 University Avenue, Toronto, Ontario, M5J 2Y1;

(iii) CNH is an indirect, wholly-owned subsidiary of CNH Industrial N.V., a Netherlands company, which, through its subsidiaries, is a manufacturer and distributor of agricultural and construction equipment;

(iv) The asset-backed securities that the Filer issues may represent the Filer's indebtedness and be secured by financial assets that the Filer acquires, such as (i) fixed or floating rate retail instalment sales contracts used to finance the purchase of new and used agricultural and construction equipment, and (ii) fixed or floating rate finance lease contracts used to finance the purchase of new and used agricultural and construction equipment together with the recourse obligation of, and the security interest in, the related financed equipment granted by CNH dealers in favour of CNH under such finance lease contracts. Alternatively, the asset-backed securities that the Filer issues may evidence ownership interests in these financial and other assets;

(v) CNH, as administrative agent (in such capacity, the Administrative Agent), carries out certain administrative and management activities for and on behalf of the Filer, pursuant to a second amended and restated administration agreement dated as of December 17, 2009 (the Administration Agreement), between CNH (formerly Case Credit Ltd.) and Computershare, as issuer trustee of the Filer (being the successor in such capacity to The Canada Trust Company). CNH, as servicer pursuant to the sale and servicing agreements for each series of notes (in such capacity, the Servicer), administers, services and manages the Purchased Assets;

(vi) The auditors of the Filer are Ernst & Young LLP;

(vii) The Filer has issued thirteen series of asset-backed securities, being: (i) Series 2000-1 receivable-backed notes having an aggregate principal amount of $326,000,167 together with an associated Class A Loan in the initial amount of $74,004,021, (ii) Series 2000-2 receivable-backed notes having an aggregate principal amount of $123,977,064, (iii) Series 2001-1 receivable-backed notes having an aggregate principal amount of $191,156,656 together with an associated Class A Loan in the initial amount of $87,759,759, (iv) Series 2002-1 receivable-backed notes having an aggregate principal amount of $156,600,000 together with an associated Class A Loan in the initial amount of $208,400,000, (v) Series 2003-1 receivable-backed notes having an aggregate principal amount of $162,450,000 together with an associated Variable Funding Note in the initial amount of $177,550,000, (vi) Series 2004-1 receivable-backed notes having an aggregate principal amount of $191,960,000 together with an associated Variable Funding Note in the initial amount of $103,040,000, (vii) Series 2005-1 receivable-backed notes having an aggregate principal amount of $250,000,000 together with an associated Variable Funding Note in the initial amount of $50,000,000, (viii) Series 2006-1 receivable-backed notes having an aggregate principal amount of $370,375,000 together with an associated Variable Funding Note in the initial amount of $79,625,000, (ix) Series 2009-1 receivable-backed notes having an aggregate principal amount of $442,874,000, (x) Series 2010-1 receivable-backed notes having an aggregate principal amount of $363,772,000 (the Series 2010-1 Notes), (xi) Series 2011-1 receivable-backed notes having an aggregate principal amount of $450,746,000 (the Series 2010-1 Notes), (xii) Series 2012-1 receivable-backed notes having an aggregate principal amount of $462,211,349 (the Series 2010-1 Notes) and (xiii) Series 2013-1 receivable-backed notes have an aggregate principal amount of $411,975,000 (the Series 2010-1 Notes). It is expected that the Filer will issue additional series of such asset-backed notes in the future to finance the acquisition of additional Purchased Assets or to refinance outstanding asset-backed notes;E

(viii) Pursuant to the Trust Indenture, the Filer has executed and delivered thirteen Series Supplements to the Trust Indenture to create and issue the asset-backed securities listed in paragraph 11(vii) above (collectively, the Series Notes); and

(ix) The Filer currently has no securities issued and outstanding other than the Series 2010-1 Notes, the Series 2011-1 Notes, the Series 2012-1 Notes and the Series 2013-1 Notes. None of the foregoing Series Notes are traded on, and there is no current intention to have any of such Series Notes or any other series of asset-backed securities traded on, any marketplace, as that term is defined in National Instrument 21-101 Marketplace Operation.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the Decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that:

(a) the Filer is not required to prepare, file and deliver Interim Financial Statements under the securities legislation of any jurisdiction in Canada, whether pursuant to exemptive relief or otherwise;

(b) in addition to complying with the annual certificate requirements pursuant to NI 52-109, for each financial year of the Filer, within 120 days of the end of the financial year (or within 90 days of the end of a financial year of the Filer if the Filer is not a venture issuer at the end of such financial year), the Filer or its duly appointed representative or agent will file through SEDAR an annual certificate in the form set out in Schedule "A" of this decision document and personally signed by a person who, at the time of filing of the annual certificate, is a senior officer of the Filer, a Servicer or an administrative agent of the Filer;

(c) for each interim period, within 60 days of the end of the interim period (or within 45 days of the end of an interim period of the Filer if the Filer is not a venture issuer at the end of such interim period), the Filer or its duly appointed representative or agent will file through SEDAR an interim certificate in the form set out in Schedule "B" of this decision document and personally signed by a person who, at the time of filing of the interim certificate, is a senior officer of the Filer, a Servicer or an administrative agent of the Filer; and

(d) the Exemption Sought will cease to be effective in a jurisdiction of Canada on the date on which a specific rule regarding substantive continuous disclosure requirements for asset-backed securities issuers (other than issuers of asset-backed commercial paper) comes into force in that jurisdiction.

"Shannon O'Hearn"
Manager, Corporate Finance
Ontario Securities Commission

 

SCHEDULE "A"

Certification of annual filings for issuers of asset-backed securities

I, <identify (i) the certifying individual, (ii) his or her position in relation to the issuer and (iii) the name of the issuer>, certify that:

1. I have reviewed the following documents of <identify issuer> (the issuer):

(a) the servicer reports for each month in the financial year ended <insert financial year end>(the servicer reports);

(b) annual MD&A in respect of the issuer's pool(s) of assets for the financial year ended <insert the relevant date> (the annual MD&A);

(c) AIF for the financial year ended <insert the relevant date> (the AIF); [if applicable] and

(d) each annual statement of compliance regarding fulfillment of the obligations of the servicer(s) under the related servicing agreement(s) for the financial year ended <insert the relevant date> (the annual compliance certificate(s)),

(the servicer reports, the annual MD&A, the AIF [if applicable] and the annual compliance certificate(s) are together the annual filings);

2. Based on my knowledge, having exercised reasonable diligence, the annual filings, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make the statements not misleading in light of the circumstances under which they were made, with respect to the periods covered by the annual filings;

3. Based on my knowledge, having exercised reasonable diligence, all of the distribution, servicing and other information and all of the reports on assessment of compliance with servicing criteria for asset-backed securities and the annual accountant's report respecting compliance by the servicer(s) with servicing criteria for asset-backed securities required to be filed under the decision(s) <identify the decision(s)> as of the date of this certificate, other than material change reports and press releases, have been filed with the securities regulatory authorities through SEDAR;

4. Option #1 <use this alternative if a servicer is providing the certificate>

I am responsible for reviewing the activities performed by the servicer(s) and based on my knowledge, having exercised reasonable diligence, and the compliance review(s) conducted in preparing the annual compliance certificate(s), and except as disclosed in the annual filings, the servicer(s) [has/have] fulfilled [its/their] obligations under the servicing agreement(s); and

Option #2 <use this alternative if the Issuer or the administrative agent is providing the certificate>

Based on my knowledge, having exercised reasonable diligence, and the annual compliance certificate(s), and except as disclosed in the annual filings, the servicer(s) [has/have] fulfilled [its/their] obligations under the servicing agreement(s); and

5. The annual filings disclose all material instances of noncompliance with the servicing criteria based on the [servicer's/servicers'] assessment of compliance with such criteria.

[In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties <insert name of issuer, servicer, sub-servicer, co-servicer, administrative agent, reporting agent or trustee>.]

Date: <insert date of filing>

____________________

[Signature]

[Title]

<indicate the capacity in which the certifying officer is providing the certificate>

NOTE TO READER

This certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109). In particular, the certifying officer filing this certificate is not making any representations relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

The issuer's certifying officer is responsible for ensuring that processes are in place to provide him or her with sufficient knowledge to support the representations he or she is making in this certificate. Investors should be aware that inherent limitations on the ability of a certifying officer of the issuer to design and implement on a cost effective basis DC&P and ICFR, as defined in NI 52-109, may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

 

SCHEDULE "B"

Certification of interim filings for issuers of asset-backed securities

I, <identify (i) the certifying individual, (ii) his or her position in relation to the issuer and (iii) the name of the issuer>, certify that:

1. I have reviewed the following documents of <identify issuer> (the issuer):

(a) the servicer reports for each month in the interim period ended <insert relevant date> (the servicer reports); and

(b) interim MD&A in respect of the issuer's pool(s) of assets for the interim period ended <insert the relevant date> (the interim MD&A),

(the servicer reports and the interim MD&A are together the interim filings);

2. Based on my knowledge, having exercised reasonable diligence, the interim filings, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make the statements not misleading in light of the circumstances under which they were made, with respect to the periods covered by the interim filings; and

3. Based on my knowledge, having exercised reasonable diligence, all of the distribution, servicing and other information required to be filed under the decision(s) <identify the decision(s)> as of the date of this certificate, other than material change reports and press releases, have been filed with the securities regulatory authorities through SEDAR.

[In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties <insert name of issuer, servicer, sub-servicer, co-servicer, administrative agent, reporting agent or trustee>.]

Date: <insert date of filing>

____________________

[Signature]

[Title]

<indicate the capacity in which the certifying officer is providing the certificate>

NOTE TO READER

This certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109). In particular, the certifying officer filing this certificate is not making any representations relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

The issuer's certifying officer is responsible for ensuring that processes are in place to provide him or her with sufficient knowledge to support the representations he or she is making in this certificate. Investors should be aware that inherent limitations on the ability of a certifying officer of the issuer to design and implement on a cost effective basis DC&P and ICFR, as defined in NI 52-109, may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.