Oct. 6 (Bloomberg) -- Canadian securities regulators propose to tighten rules on the sale of some types of asset- backed commercial paper following last year's collapse of C$32 billion ($30 billion) of debt.

The regulators in 13 Canadian provinces and territories propose that companies issue a prospectus describing the main features of the investment before selling it. The regulators also recommend that all information from credit-rating companies relating to the debt is made public.

``We believe that the proposals reflect a measured regulatory response that address our investor-protection mandate,'' Jean St-Gelais, chief executive officer of the Quebec regulator, Autorite des marches financiers, said in a statement today.

Asset-backed commercial paper sold by non-bank dealers stopped trading in Canada in August 2007 when investors began to shun the debt because of concerns about links to high-risk mortgage loans in the U.S. About C$32 billion of the 30- to 90- day debt was put under bankruptcy protection and restructured to notes maturing within nine years. The replacement notes are scheduled to be issued this month.

The limited transparency in pools of mortgage-backed securities, asset-backed paper or collateralized debt obligations meant investors couldn't easily identify the assets underlying the securities, the regulators said in a report.

The regulators also proposed that only investors with at least C$5 million in assets or earning more than C$200,000 a year should be allowed to buy the debt.

The regulators will accept comments from the public on the proposals until Dec. 20, before implementing final rules.

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Last Updated: October 6, 2008 15:05 EDT