Stephen R. Ashbourne
Partner | Toronto
Toronto: 416-863-3086

Steve practises in the areas of securities and commercial law, with a specialty focus on derivatives, structured finance transactions and complex capital markets arrangements and offering structures. With 28 years of practice experience, Steve combines extensive knowledge of securities and commercial law, with a deep understanding of related tax, insolvency and regulatory law topics, to provide clients with insightful, creative and practical advice.

Steve has acted on many firsts relating to derivatives, securitization, structured products and electronic trading, and has extensive experience designing, "Canadianizing" and implementing financial products and strategies in both the domestic and cross-border contexts. He has pioneered transaction structures and market precedents, including to create and distribute a wide range of derivatives, derivatives-based financial products and asset-backed securities. Many of these transactions have involved novel features and creative pathways through Canada’s securities, commercial, tax and insolvency regimes.

Steve regularly advises financial institutions, end users and market intermediaries regarding legal and regulatory developments impacting over-the-counter derivatives and asset-backed securities. He frequently interacts with Canada’s regulators, including by serving on advisory committees formed by Canada's securities regulators.

Steve has a dedicated approach to staying current. He is a frequent speaker and author on related topics and has taught law school courses on derivatives, structured finance and securities law subjects.

SELECT EXPERIENCE

Derivatives

Steve regularly acts for leading Canadian financial institutions, dealers, pension and insurance clients regarding contracting, enforcement and regulatory matters involving over-the-counter derivatives. Recent examples include:

  • Acting as counsel on behalf of Canada’s six major Schedule I banks to obtain exemptive relief from Canada’s provincial securities regulators, including in respect of derivatives trade reporting obligations

  • Acting for domestic and non-Canadian banks to negotiate and implement ISDA transaction documentation, including amendments to ISDA contracts in connection with the implementation of regulatory margin rules across clients’ OTC derivatives portfolios

  • Regularly advising clients regarding various commercial and insolvency opinion-related matters and securities law (derivatives) compliance requirements, including regarding netting, collateral perfection and realization, mandatory trade reporting, margin posting and clearing requirements and the recent CSA proposals regarding dealer and adviser registration and business conduct requirements

  • Acting for banks, dealers and originators to develop and implement issuing and offering platforms for a full range of derivatives, linked notes and other retail derivatives-based products, including obtaining novel exemptive relief from Canada’s securities regulators

Steve also regularly advises clients in adjacent practice areas, including regarding securities lending and repurchase transactions, collateralization structures, monetization structures, equity repurchase transactions, arbitrage and hedging strategies and synthetic investment techniques. He also regularly participates in regulatory advisory processes established by Canada’s securities regulators to provide input and make recommendations regarding OTC derivatives and related rules.

Structured Finance

Steve’s recent structured finance work includes:

  • Representing the Province of Ontario to develop, document and implement the legislation and commercial aspects of its Fair Hydro Plan, financed by “Fair Hydro Trust” under an innovative structured financing platform that is functionally similar to a U.S.-style “stranded costs’ transaction

  • Representing Element Fleet Management Corp. and ECN Capital Inc. to establish and implement domestic and cross-border securitization programs for various asset classes, including aircraft loans and leases, automotive loans and leases, equipment loans and leases, and railcars assets

  • Representing both buyers and sellers of consumer loan portfolios subject to existing securitizations or to be financed from the proceeds of newly established securitization financing programs

  • Representing buyers and sellers of commodity pools and related financial assets, including bankruptcy remote sales of oil and gas inventories and uranium toll revenue streams

  • Representing clients to address Canadian structuring issues arising as a result of U.S. and European regulatory reforms, including in relation to risk retention requirements

Past structured finance work of note includes:

  • Representing the large investors in connection with the successful restructuring of C$35-billion of frozen non-bank asset-backed commercial paper, including playing a leading role in the design, development, adoption and implementation of the rescue plan

  • Leading Blakes’ efforts on the structured finance aspects of several other large restructurings and divestitures that occurred in the wake of the global financial crisis, including the sale of two substantial credit card portfolios, amounting to over C$11-billion of receivables, which were subject to continuing public securitization platforms

  • Designing and implementing novel “co-ownership” and “split share” transaction structures, which are now commonly used to securitize revolving portfolios of credit cards, consumer loans and to stream attributes of underlying financial assets

  • Designing and implementing transaction structures to repackage and monetize illiquid structured finance instruments

  • Acting for leading Canadian retailers to develop and implement substantial “master trust” credit card securitization programs, including the first applications of the shelf prospectus regime for asset-backed securities

  • Acting for Canada’s securities regulators to draft the offering and disclosure laws that to apply to Canadian asset-backed securities

Steve also plays a prominent market role in contributing to Canada’s securitization market, including by participating in committees established by the Canadian Institute of Chartered Accountants to develop and apply accounting rules to Canadian securitizations and special purpose entities; preparing submissions on behalf of the leading industry committee in connection with securities reforms proposed by Canada's securities regulators in relation to securitization matters; and assisting the Ontario Securities Commission to examine specific commercial and securities law issues relevant to the structured finance market.

Market Infrastructure

Steve has leading expertise in relation to market regulation and related securities, derivatives and futures trading, listing, clearing and registration requirements. Recent work in the area includes:

  • Representing clearing agencies to obtain exemptive relief

  • Advising a leading trade matching service regarding its Canadian regulatory obligations

  • Advising numerous dealer and adviser clients regarding registration requirements and available exemptions

Past work of note in the area includes:

  • Acting for Canadian banks to establish Alpha Trading, as an alternative trading system for equities, and then for Alpha Trading itself, until it was acquired by the Toronto Stock Exchange

AWARDS & RECOGNITION

Steve has been recognized in the following publications and awards:

  • The Best Lawyers in Canada (Derivatives)
  • The Canadian Legal Lexpert Directory - Asset Securitization and Derivative Instruments

  • Legal Media Group's Guide to the World's Leading Lawyers in Banking, Finance and Transactional Law - Structured Finance and Securitisation - Canada

  • Lexology and International Law Office Client Choice Awards - Securitization & Structured Finance - Ontario (2010, 2011, 2013 and 2014) and Securitization & Structured Finance - Canada (2010, 2011, 2013 and 2014)
PUBLICATIONS
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Blakes Bulletin on Financial Services Regulatory, and Structures Finance & Derivatives, May 18, 2016.
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