Windsor Auto Trust (Re), 2008 CanLII 36923

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions - Issuer of mortgage pass-through securities previously granted an exemption from the requirements to file annual and interim financial statements, subject to certain conditions. Issuer granted an exemption from the requirements in Multilateral Instrument 52-109 to file interim and annual certificates, subject to certain conditions, including the requirement to file alternative forms of annual and interim certificates.

Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings

July 18, 2008

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

Windsor Auto Trust (the Filer)

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 Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109) to file interim and annual 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 the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

Interpretation

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

Representations

This Decision is based on the following facts represented by the Filer:

The Filer is a special purpose vehicle created pursuant to a declaration of trust made as of October 14, 2003 under the laws of the Province of Ontario, the beneficiary of which is a charity registered under the Income Tax Act (Canada). The only security holders of the Filer are and will be the holders of its asset-backed securities.
The issuer trustee of the Filer is the Canada Trust Company of Canada, whose principal office is located in Toronto, Ontario. The head office of DaimlerChrysler Financial Services Canada Inc., the administrative agent of the Filer, is located in Windsor, Ontario.
The Filer is a reporting issuer, or the equivalent, in each of the provinces of Canada that provides for a reporting issuer regime.
The Filer is a “venture issuer” as defined in National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102).
The Filer is not in default of any of the requirements of the Canadian securities legislation in any jurisdiction.
The Filer does not carry on any activities other than issuing asset-backed securities and purchasing assets as described in paragraph 7.
The Filer has no material assets or liabilities other than its rights and obligations arising from the purchase or other acquisition from time to time of receivables arising under contracts for the purchase of automobiles and light-duty trucks sold by dealerships located in Canada that meet certain eligibility requirements, all related severity, all collections with respect thereto and all proceeds of the foregoing and the issuance of asset-backed securities to fund such purchase or other acquisition.
Pursuant to a decision document dated June 3, 2004 and an order of the New Brunswick Securities Commission dated August 30, 2005, in each case as varied by a decision document dated May 5, 2006 (collectively, the Previous Decision), the Filer is exempted, on certain terms and conditions, from the requirements of the securities legislation of each of the provinces of Canada, other than Prince Edward Island, concerning, inter alia, the preparation, filing and delivery of interim and annual financial statements (Financial Statements) pursuant to NI 51-102.
Pursuant to an MRRS decision document dated June 3, 2005, as varied by a decision document dated May 5, 2006 (the Original Decision), and a decision of the Autorité des marchés financiers dated December 20, 2005, the Filer is exempted, on certain terms and conditions, from the requirements in MI 52-109 to file interim and annual certificates, which relief terminated on June 1, 2008.
The representations contained in the Original Decision and Previous Decision remain true and accurate and are incorporated by reference into this decision document as representations of the Filer, with the exception of:

(a) paragraph 16 of the Previous Decision, which should be replaced with the following:

“16. the Administration Agreement will and a Receivables Purchase Agreement may require, DCFSC, in its capacity as Administrative Agent and Servicer, as applicable, to deliver or cause to be delivered various compliance reports;”

(b) paragraph 17 of the Previous Decision, which should be replaced with the following:

“17. a Receivables Purchase Agreement will require that the Servicer deliver a monthly report (the “Servicer Report”) to the Applicant, the Indenture Trustee, the rating agencies and the holders of the Notes of the series to which such Receivables Purchase Agreement relates on or before the second business day prior to the 15^th day of each month. The Servicer Report will provide various items of information relating to the Purchased Assets to which the Receivables Purchase Agreement relates and distributions from and deposits to the related Collection Account, the related Pay-Through Protection Account, if any, and the related Reserve Account;”

“19. the Receivables Purchase Agreements, pursuant to which Purchased Assets were acquired with the proceeds of the Series 2003-A Notes and the Series 2004-A Notes, require, and each other Receivables Purchase Agreement, pursuant to which Purchased Assets are acquired with the proceeds of Notes issued to other than sophisticated investors, may require, the Servicer to have a firm of independent chartered accountants deliver to each of the Applicant, the rating agencies and the Servicer on or before April 30 of each year, a report (the “Annual Accountants’ Servicing Report”) to the effect that such firm has performed tests relating to retail receivables (including financing arrangements with obligors to finance their Financed Vehicles) serviced for others, which procedures will be based upon the requirements of the Uniform Single Attestation Program for Mortgage Bankers, to the extent the procedures in such program are applicable to the servicing obligations set forth in the Receivables Purchase Agreement to which they relate and, except as described in the report, disclosed no exceptions or errors in the records relating to such retail receivables that, in the firm’s opinion, such program requires such firm to report;”

(d) paragraph 20 of the Previous Decision, which should be replaced with the following:

“20. the Receivables Purchase Agreements, pursuant to which Purchased Assets were acquired with the proceeds of the Series 2003-A Notes and the Series 2004-A Notes, require, and each other Receivables Purchase Agreement, pursuant to which Purchased Assets are acquired with the proceeds of Notes issued to other than sophisticated investors, may require, the Servicer to furnish to the Applicant and such other persons as the Applicant may designate, in respect of the preceding fiscal year, a certificate of an officer of the Servicer (the “Annual Servicer’s Compliance Certificate”), certifying that the Servicer complied in such year with its obligations under the applicable Receivables Purchase Agreement except to the extent non-compliance therewith did not have an adverse effect;” and

(e) subparagraphs (b) and (c) of paragraph 25 of the Previous Decision, which should be replaced with the following:

“(b) the Annual Servicer’s Compliance Certificate, if required to be delivered by the related Receivables Purchase Agreement; and

(c) the Annual Accountant’s Servicing Report, if required to be delivered by the related Receivables Purchase Agreement.”

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 Financial Statements under the securities legislation of any jurisdiction in Canada, whether pursuant to exemptive relief or otherwise;

(b) for each financial year of the Filer, within 90 days if the Filer is not a venture issuer, or 120 days if the Filer is a venture issuer, of the end of the 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) if the Filer voluntarily files an AIF, as defined in NI 51-102, for a financial year after it has filed the annual certificate referred to in paragraph (b) above for the financial year, the Filer will file through SEDAR a second annual certificate that:

(i) is in the form set out in Schedule “A” of this decision document;

(ii) is personally signed by a person who, at the time of filing of the second annual certificate, is a senior officer of the same person or company of which the senior officer who signed the annual certificate referred to in paragraph (b) is an officer; and

(iii) certifies the AIF in addition to the other documents identified in the annual certificate;

(d) for each interim period, within 45 days if the Filer is not a venture issuer, or 60 days if the Filer is a venture issuer, of the end of the interim period of the Filer, 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

(e) the Exemption Sought will cease to be effective in a jurisdiction of Canada on the earlier of:

(i) June 1, 2013, and

(ii) the date on which a rule regarding the continuous disclosure requirements for asset-backed securities issuers comes into force in that jurisdiction.

“Jo-Anne Matear”

Jo-Anne Matear

Assistant Manager, Corporate Finance

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:

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

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

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

(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 <insert relevant date> (the annual compliance certificate(s)),

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

Based on my knowledge, 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;
Based on my knowledge, 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;
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 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 of the administrative agent is providing the certificate>

Based on my knowledge 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; and
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]

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:

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 pools of assets for the interim period ended <insert relevant date> (the interim MD&A),

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

Based on my knowledge, 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
Based on my knowledge, all of the distribution, servicing and other information required to be filed under the decision(s) <identify decisions> 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.

Date: <insert date of filing>

[Signature]

[Title]