UPDATE 1-Bank of Canada to add certain C$ ABS to approved collateral list

Thu Jan 29, 2015 4:45pm EST
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OTTAWA Jan 29 (Reuters) - The Bank of Canada announced plans on Thursday to add certain Canadian-dollar denominated term asset-backed securities (ABS) to the list of eligible collateral under the central bank's Standing Liquidity Facility.

The acceptable asset-backed securities would include those backed by residential mortgages. The change is slated to take effect on March 31.

The central bank outlined a number of conditions for eligibility, including that only securities from programs of "sufficiently high quality" as determined by the Bank of Canada will be accepted.

The bank reviews its collateral policy on an ongoing basis and term ABS has been under consideration for some time, a spokeswoman for the bank said. It already accepts asset-backed commercial paper.

(Reporting by Randall Palmer and Leah Schnurr; Editing by Chizu Nomiyama)