The Minister of Finance has approved the revocation and replacement of OSC Rule 13-502 Fees and OSC Rule 13-503 (Commodity Futures Act) Fees. The Rules and related companion policies were previously published and approved by the OSC.
The Office of the Superintendent of Financial Institutions and the Bank of Canada have authored "Lessons from banking reform: A Canadian perspective", which reviews the recent performance of Canadian banks, the regulatory environment and includes a discussion regarding financial reform.
On May 25, 2009, the Investment Industry Regulatory Organization of Canada (IIROC) announced that it has established a whistleblower service to allow individuals to report, online or by phone, "potential systemic wrongdoing, potential securities frauds or unethical behaviour by individuals or firms in the investment industry." IIROC's news release states that it will "immediately assess and ensure that prompt and appropriate follow-up action on reported issues or behaviour is taken."
The service is in effect as of May 25.
On May 20, the Securities and Exchange Commission proposed rule amendments "that would provide shareholders with a meaningful ability to...nominate the directors of the companies that they own." Under the proposals, shareholders that meet certain thresholds (including holding between 1% and 5% of the voting securities, depending on the circumstances) would be eligible to have their nominee included in proxy materials. The proposed amendments would also allow for shareholder proposals in proxy materials regarding a company's nomination procedures under certain circumstances.
Public comment on the proposed amendments will be accepted for 60 days after their publication.
On May 22, 2009, the Investment Industry Regulatory Organization of Canada (IIROC) released proposed amendments to Dealer Member Rule 1300.1, regarding the trading in securities of U.S. over-the-counter (OTC) issuers. Under the proposed amendments, Dealer Members would not be permitted to accept an order to sell OTC issuer securities until the dealer had "made the inquiries necessary to form a reasonable belief" that it knew the "true identity of every beneficial owner of those securities". In cases where the beneficial owner is not a natural person, the dealer would have to form a reasonable belief as to the identity of every natural person who controls the beneficial owner. Exemptions to this requirement would be permitted for American Depository Receipts and for any OTC securities for which the issuer has a class of securities listed or quoted on the TSX, TSXV, CNQ, NYSE, AMEX or NASDAQ and under certain circumstances, isolated trades.
The intention of the amendments is to "discourage abusive and illegal OTC market activity", which the notice stated has been a "source of scandal". IIROC cited the actions taken in British Columbia to prevent such abuse and the need to prevent such behaviour moving elsewhere within Canada. Comments on the proposed amendments are being accepted until July 21, 2009.
On May 22, 2009 the Ontario Securities Commission (OSC) published a request for comments on a second set of proposed amendments to NI 45-106 Prospectus and Registration Exemptions, OSC Rule 45-501 Ontario Prospectus and Registration Exemptions and NI 45-102 Resale of Securities (collectively, the “Prospectus and Registration Rules”). This second set of amendments has been proposed in connection with proposed amendments to the Securities Act (Ontario) (OSA) under Bill 162 An Act respecting the budget measure and other matters (specifically Schedule 26 relating to the OSA). The second set of amendments is required in order to remove or modify certain provisions of the Prospectus and Registration Rules that are proposed to be superseded by specific provisions of the OSA under Bill 162.
Continue Reading...On May 21, the Canadian Securities Administrators published Staff Notice 52-324 to provide an update on issues related to the impending transition from Canadian GAAP to International Financial Reporting Standards (IFRS). As detailed in our previous posts, the CSA have published various notices detailing their proposals on a wide range of transition issues for the time-period leading up to the Canadian transition date for publicly accountable enterprises for fiscal years beginning on or after January 1, 2011. This most recent notice sets out the current views of the CSA on early transition to IFRS, requirements for interim financial statements in the year of IFRS adoption and references to IFRS and Canadian GAAP.
With respect to early transition, the CSA reiterate that domestic issuers wishing to adopt IFRS for fiscal years prior to January 1, 2011 must apply for exemptive relief, which will be recommended on a case by case basis based on the criteria outlined in Staff Notice 52-321. Further, the CSA propose requiring issuers to disclose compliance with International Accounting Standard 34 Interim Financial Reporting in their interim financial statements in the year of IFRS adoption. A domestic issuer would also have to include an IFRS-compliant balance sheet as at the issuer's transition date. The staff notice also includes proposed options for referring to IFRS as opposed to Canadian GAAP in notes to financial statements and in the auditor's report and proposes providing relief from existing requirements that financial statements be prepared in accordance with the same accounting principles for all periods presented in the financial statements. The CSA are also considering extending the filing deadline for a domestic issuer's first interim filings after January 1, 2011 in order to assist issuers with the challenges associated with transitioning to IFRS.
The CSA expect to publish details of their proposals from this staff notice for comment later this year.
Effective for the 2009 proxy season, the Canadian Securities Administrators (CSA) have adopted new requirements for executive compensation disclosure (the New Disclosure Requirements). Stikeman Elliott's "Executive Compensation After the Boom" highlights current trends in executive compensation and their impact on compensation decisions. The following excerpt reviews the trend towards wealth accumulation analysis.
Wealth Accumulation Analysis
Focussing on the different tools at the disposal of the board or compensation committee in developing pay packages, another emerging trend is the move towards a broad-based and more holistic wealth accumulation analysis.
Continue Reading...On May 8, the TSX published a staff notice respecting the additional information required to be submitted in the case of changes and new appointments in directors, officers and trustees of listed issuers. The additional information now required on Form 3 - Change in Officers/Directors/Trustees includes a ten-year address history, citizenship and previously used names. According to the TSX, the additional information "will permit TSX to conduct a meaningful media review" on new appointees. The expanded Form 3 is expected to be available on May 15 and once operational, non-exempt issuers will no longer be required to file a Form 4 - Personal Information Form for new appointees. Form 4 will still be required, however, for original listings and on the TSX's request.
The Mutual Fund Dealers Association of Canada recently published proposed amendments to its rules with respect to client accounts, client communications and client reporting. The proposed amendments were originally published in 2008, but have been revised in response to comments received and to minimize differences between the Client Relationship Model of the MFDA and IIROC. Comments are being accepted by the MFDA prior to July 23, 2009.
Following publication by the UN's Security Council Committee established pursuant to resolution 1718 (2006), a list of entities has now been established under the Regulations Implementing the United Nations Resolution on the Democratic People's Republic of Korea (UNRDPK).
Similar to their obligations under the the Criminal Code, Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (UNRST), United Nations Al-Qaida and Taliban Regulations (UNAQTR) and Regulations Implementing the United Nations Resolution on Iran (UNRI), entities authorized under provincial legislation to engage in the business of dealing in securities (dealers), or to provide portfolio management or investment counselling services (advisers), must review their records on a continuing basis to determine whether or not they are in possession or control of property owned by or on behalf of an entity designated under the list. Together with their reports under the Criminal Code, UNRST, UNAQTR and UNRI, dealers and advisers are to report their findings on a monthly basis to their principal regulator in Canada.
Names of persons and entities included under the lists provided for under the Criminal Code, UNRST, UNAQTR, UNRI and UNRDPK are published on the Office of the Superintendent of Financial Institutions Canada (OSFI) website. OSFI publishes separate lists for each of the Criminal Code/UNRST/UNAQTR, UNRI and UNRDPK.
On May 1, 2009, the Ontario Securities Commission (OSC) published a statement setting out its proposed priorities for the fiscal year ending March 31, 2010. The OSC's strategic goals consist of identifying important issues and dealing with them in a timely fashion, delivering fair, vigorous and timely enforcement and compliance programs, championing investor protection and supporting a more flexible, efficient and accountable organization. Specific initiatives for the upcoming fiscal year, meanwhile, include drafting National Instrument 31-103 Registration Requirements, managing the transition to IFRS, focusing compliance efforts on new and high-risk market participants and expanding capabilities and sensitivities to investor issues.
IIROC recently published for comment proposed amendments (Proposed Amendments) to Dealer Member Rule 100.2(f). The Proposed Amendments are to those amendments proposed by IIROC under the Equity Margin Project (the Main Proposal), which are currently being reviewed by the securities commissions. The Proposed Amendments are intended to simplify a number of processes for IIROC staff and Dealer Members regarding the implementation and ongoing support of the Equity Margin Project's new methodology for margining equity securities. Comments on the Proposed Amendments will be accepted by IIROC until June 30, 2009.
Enter keywords:
