Posted on October 28, 2008
In response to the CSA's proposed amendments to NI 23-101 Trading Rules, released earlier this month, IIROC has now published for comment proposed amendments to the Universal Market Integrity Rules that would correspond to the changes to NI 23-101. IIROC's proposed amendments would include repealing the rule and policies respecting the "best price" obligation concurrent with the implementation of trade-through protection. With the publication of the proposed amendments, IIROC also withdrew from further consideration interim provisions on trade-through obligations, previously published by Market Regulation Services (a predecessor to IIROC). Until the amendments implementing trade-through protection are made to NI 23-101 and UMIR, however, Participants remain subject to the "best price" obligation under Rule 5.2 of UMIR.
Posted on October 24, 2008
The CSA and the Canadian Council of Insurance Regulators, comprising the Joint Forum of Financial Market Regulators, have released their proposed Framework 81-406 Point of sale disclosure for mutual funds and segregated funds. This framework set out concepts and principles reflecting the Joint Forum’s vision for more meaningful and effective disclosure.
Prior to publishing proposed changes to existing securities laws required to implement this framework, the CSA is seeking feedback on the proposal. Comments may be submitted by December 23, 2008.
Posted on October 24, 2008
The OSC has published notice of Ministerial Approval of the revised National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (previously published in the OSC Bulletin on August 15, 2008, click here for our previous post) and has confirmed that new rule, and related forms and companion policy, will come into force on December 15, 2008.
As a consequence of the implementation of the revised National Instrument 52-109, CEO and CFO certifications filed under the revised rule will be required to include, among other things, a certification that the CEO and CFO have evaluated the effectiveness of the issuer's internal control over financial reporting and have caused the issuer to disclose their conclusions about such effectiveness in the issuer's MD&A. The revised rule also contains new forms of certifications for venture issuers and for issuers completing an IPO or reverse-takeover.
As a consequence of these amendments, the MD&A form (Form 51-102F1) will also be amended, effective December 15, 2008, to include specific reference to the disclosure required to be included in the MD&A under the revised certification rule.
Posted on October 23, 2008
In response to the recent turmoil in global markets, Canadian Minister of Finance Jim Flaherty announced this morning the creation of the Canadian Lenders Assurance Facility. The facility, to commence in November and run for six months, will offer insurance on the wholesale term borrowing of federally regulated deposit-taking institutions. Insurance will be available on certain debt issues with a term to maturity of at least three months. The stated intention of the initiative is to ensure that Canadian financial institutions "are not put at a competitive disadvantage when raising funds in wholesale markets given similar actions recently announced by other countries."
Continue Reading...
Posted on October 22, 2008
Deer Creek Energy Ltd. v. Paulson & Co., Inc., June 13, 2008 | 2008 ABQB 326 (Court of Queen's Bench).
Andrew Cunningham
Alberta judge holds market valuation soundest basis for deciding fair value of dissenters’ shares; dissenters not permitted to take advantage of spike in market price after first stage of two-step transaction. Court also rejects dissenters’ claim for far higher valuation based on future possibilities, even though some of these had been touted by company in its marketing efforts.
In this long‑anticipated ruling, Madam Justice Romaine of Alberta’s Court of Queen’s Bench found that “market value” was the primary consideration in valuing the shares of dissenting shareholders of Deer Creek Energy Ltd., an ABCA corporation involved in an oil sands project near Fort McMurray, Alberta.
Continue Reading...
Posted on October 21, 2008
Simon Romano, Ramandeep Grewal and Daniella Laise | 
PDF Version
On September 18, 2008, the CSA published their final rule regarding the repeal and substitution of the current executive compensation disclosure form, also known as Form 51-102F6 (the Current Form). Under this rule, a revised Form 51-102F6 (the New Form) will be implemented, significantly changing current requirements with respect to disclosure of executive compensation and related matters.
The CSA published their initial proposals for the overhaul of executive compensation disclosure on March 29, 2007 (the 2007 Proposal) and the Current Form is a result of the subsequent comment and review process. The 2007 Proposal was based to a significant extent on changes adopted by the U.S. Securities and Exchange Commission (the SEC) in August 2006. Following receipt of substantial comments on the 2007 Proposal, the CSA republished a revised proposal on February 22, 2008, which was further revised and published as a final rule on September 18, 2008. The New Form introduces significant changes to the executive and director compensation disclosure requirements from those set out in the Current Form. As currently stated by the CSA, they expect this disclosure to apply in respect of financial years ending on or after December 31, 2008.
Continue Reading...
Posted on October 17, 2008
The CSA have published proposed amendments to National Instrument 21-101 Marketplace Operation (NI 21-101) and National Instrument 23-101 Trading Rules (NI 23-101) (the ATS Rules) (and their related companion policies) for comment and review. The proposed amendments include proposals for a framework to implement trade-through protection that will require all visible, immediately accessible, better-priced limit orders to be filled before other limit orders at inferior prices, regardless of the marketplace where the order is entered. Other amendments relate to clock synchronization, technology requirements for marketplaces, information processor requirements, and best execution reporting requirements.These proposed amendments on trade-trough protection have been developed further to the discussion paper published by the CSA on July 22, 2005, entitled CSA Discussion Paper 23-403 Market Structure Developments and Trade-through Obligations and the Joint Notice on Trade-Through, Best Execution and Access to Marketplaces published by the CSA in conjunction with RS (now IIROC) on April 20, 2007. Comments on these proposed amendments will be accepted until January 15, 2009.
Posted on October 17, 2008
In addition to its ABCP study, IIROC has also published for comment a draft guidance note entitled "Best practices for product due diligence". Specifically, IIROC is requesting comment on the relevant criteria in determining whether a product should be subject to a due diligence review, factors to be considered in conducting product due diligence and the structures and procedures necessary for an effective review.
Posted on October 17, 2008
On October 17, the Investment Industry Regulatory Organization of Canada (IIROC) announced the publication of a study concerning the manufacture and distribution of third-party asset-backed commercial paper in Canada. The study reviews the events leading up to the "liquidity crisis" of August 2007 in the ABCP market and includes recommendations concerning product due diligence, product transparency, conflicts of interest and credit ratings.
Posted on October 16, 2008
In June, the BCSC imposed Conditions of Registration for B.C. investment dealers that trade in securities of over-the-counter (OTC) issuers through a B.C. office. Investment dealers that trade in American OTC markets must complete and file Form B, which records the information required under the conditions, within 30 days of the end of each calendar quarter.
The conditions expire on December 31, 2011.
Posted on October 16, 2008
On October 15, 2008, IIROC published a notice regarding the approval of amendments to the Universal Market Integrity Rules respecting short sales and failed trades. The amendments are based on an earlier notice, published in September 2007, and are intended to address potential abusive short selling and failed trade activity. These amendments will require reporting of failed trades after 10 trading days, limit the ability to cancel or vary executed trades, and allow IIROC to designate certain securities as ineligible for short sales entirely. They are also expected to involve the imposition of hard “pre-borrow” requirements in the case of persons who have executed failed trades, which will be subject to a request for comments. IIROC also announced that it is deferring adopting the removal of current short sale price restrictions and the removal of current requirements to file bi-monthly aggregate short position reports.
Posted on October 16, 2008
On October 9, 2008, the Alberta Securities Commission announced that it was granting recognition to the Natural Gas Exchange (NGX) to operate as an Exchange and Clearing Agency. Wholly owned by TMX Group, the NGX is based in Calgary and operates an energy exchange and a physical clearning and settlement facility for natural gas and electricity contracts.
Posted on October 7, 2008
In response to last week's OSC Extension Order with regards to the prohibition on the short sale of certain TSX-listed financial companies, IIROC has published guidance on the handling of short sales.
Posted on October 6, 2008
PDF Version
On October 6, 2008 the Canadian Securities Administrators (the CSA) published CSA Consultation Paper 11-405 entitled “Securities Regulatory Proposals Stemming from the 2007 – 08 Credit Market Turmoil and its effect on the ABCP Markets in Canada” (the Consultation Paper). The Consultation Paper is divided into two parts, with the first part providing a narrative overview of the background to the credit market turmoil in the United States, its spread into Canada and its impact on the non-bank sponsored portion of the asset-backed commercial paper (ABCP) market in Canada. The second part of the paper sets out proposals made under the Concept Paper to deal with the credit market turmoil and related issues in Canada.
Continue Reading...
Posted on October 3, 2008
Today, the OSC extended its prohibition on short sales of certain TSX-listed financial companies that are interlisted in the U.S. or have outstanding securities that are interchangeable into shares of a financial company listed in the similar SEC Order. The prohibition expires on October 8, 2008, which corresponds to the expiration of the SEC Order, now that the "bailout" bill has been signed. The original Temporary Order, implemented September 19 and amended on September 22, was set to expire today.
Posted on October 3, 2008
The MFDA is publishing for comment proposed amendments to Rule 2.6 Borrowing for Securities Purchases. The proposed amendments would require leverage risk disclosure only when an Approved Person makes a recommendation to invest using borrowed funds or becomes aware of a client borrowing for investment. The proposed amendments would also exempt RRSP loans from the disclosure requirements of Rule 2.6. In conjunction with the proposed amendments, MFDA staff will be revising the prescribed risk disclosure language in MR-0006 to provide a brief explanation of key risks and relevant considerations in plain language. The comment period expires November 3, 2008.
Posted on October 3, 2008
The OSC is publishing for a 90-day comment period (ending January 3, 2009) OSC Rule 13-503 (Commodity Futures Act) Fees and the corresponding Companion Policy. The Rule and Companion Policy are intended to replace, and are consistent with, the current rule and policy. The proposed changes include the following:
- relying on historical data, as opposed to forecasted data in determining the size of market participants for the purpose of calculating participation fees;
- making changes governing the calculation of late fees;
- clarifying the calculation of a CFA registrant's Ontario percentage;
- changing and clarifying timing references;
- making adjustments to the participation fees; and
- make adjustments to activity fees.
Posted on October 3, 2008
The OSC is publishing for a 90-day comment period (ending January 3, 2009) OSC Rule 13-502 Fees and the corresponding Companion Policy. The Rule and Companion Policy are intended to replace, and are consistent with, the current rule and policy. The proposed changes include the following:
- relying on historical data, as opposed to forecasted data, in determining the size of market participants for the purpose of calculating participation;
- eliminating special participation fees for those becoming or ceasing to be reporting issuers;
- making changes governing the calculation of late fees;
- changing and clarifying timing references;
- expanding the exemption from participation fees for reporting issuers that are subsidiaries;
- eliminating rule allowing certain reporting issuers to pay provisional participation fees;
- clarifying the calculation of a market participant's Ontario percentage;
- making adjustments to participation fees;
- making adjustments to late fees associated with the late filing of documents; and
- making adjustments to activity fees.
OSC Rule 13-502 does not include proposed fee changes reflected in proposed National Instrument 31-103 Registration Requirements. If the reform of the registration requirements is implemented in Ontario, further fee changes will need to be made.
Posted on October 3, 2008
The OSC has adopted OSC Policy 51-604 Defence for Misrepresentations in Forward-Looking Information. The purpose of this Policy is to outline the OSC’s views on some of the policy considerations underlying the defence for misrepresentations in forward-looking information contained in an issuer’s disclosure. The Policy explains how the OSC approaches the interpretation of certain aspects of the defence, including: (i) the “proximate” requirement; (ii) the required content of applicable risk factor and assumption disclosure; (iii) the “reasonable basis” requirement; and (iv) the operation of the defence with respect to oral statements containing forward-looking information.
For a more detailed analysis of the original proposal on which the Policy is based, see our update of June 2006.
Posted on October 3, 2008
The SEC announced yesterday that it was extending the Emergency Order of September 18 prohibiting the short selling of financial institutions. The Order was set to end at the end of the day on October 2nd, but considering the current state of the market, the SEC decided to extend the Order until the earlier of either the President's signing of the market "bailout" bill or 11:59 p.m. on October 17th, 2008.
Posted on October 2, 2008
The SEC has also extended its Emergency Order of September 17, 2008, which banned "naked" short selling. The Order was set to expire at the end of day October 1, but has now been extended to 11:59 p.m. on October 17, 2008. In the press release accompanying the extension Order, the SEC also communicated that the temporary reporting requirements regarding new short sales and the penalties for violations will extend beyond the above date in the form of an interim final rule.
Posted on October 2, 2008
On October 1, the SEC announced that it is extending its Emergency Order of September 18 temporarily broadening the safe harbour from liability for issuers repurchasing securities. The extended Order will now terminate at 11:59 p.m. on October 17, 2008.
Update: The TSX has taken a similar course of action, extending its previous notice to October 17.
Posted on October 2, 2008
On September 30, IIROC published a notice setting out its position and providing guidance to its Dealer Members regarding the adoption of IFRS. As they are considered to be "publicly accountable enterprises", Dealer Members will also be subject to the Canadian Accounting Standards Board's decision to move from Canadian GAAP to IFRS as of January 1, 2011. This notice sets out IIROC's views on some of the transition issues raised by the move to IFRS for Dealer Members, including IIROC's decision not to permit early adoption prior to January 1, 2011. The notice also reminds Dealer Members that they are required to conduct their own firm-specific impact assessments and conversion planning (which may require the input of outside expertise), and that they will be required to submit progress reports on their conversion plans, with the first report to be due by April 1, 2009. While the conversion date is January 1, 2011, as set out in the notice, Dealer Members will need to start planning for and implementing necessary changes well prior to 2011, including running parallel IFRS-based accounting records for up to a year prior to conversion. Some of the critical and regulatory reporting dates are also set out in the notice.
View Archives / Tags
