Securities and Mergers & Acquisitions Bulletin

November 2009 Fasken Martineau DuMoulin LLP

CSA Issues Staff Notice Regarding Maintenance of the Current Corporate Governance Regime

Author: Jessica Catton

The Canadian Securities Administrators 3. A principles-based approach to (the “CSA”) has recently issued Staff determining director and audit committee Notice 58-305 – “Status Report on the member independence would have Proposed Changes to the Corporate replaced the current approach in National Governance Regime” (the “Notice”). The Instrument 52-110 Audit Committees. Notice outlined the CSA’s reasons for deciding not to implement significant In the initial proposal, Jean St-Gelais, changes to the corporate governance Chair of the CSA and President & Chief regime in Canada. Executive Officer of the Autorité des marchés financiers noted that the Proposed Amendments proposed governance regime was “intended to provide greater transparency On December 19, 2008, the CSA sought for the marketplace regarding issuers’ comments on proposed amendments to its corporate governance practices and to Vancouver corporate governance and audit provide guidance to issuers.” committee regimes. The proposed regimes Calgary would have introduced changes in three Comments Received main areas: Toronto The CSA received numerous comments

Ottawa 1. National Policy 58-201 Corporate addressing the timing of the proposed Governance Principles would have been a changes. The CSA reported that the Montréal more principles-based policy that was commentators noted that issuers are broader in scope than the current policy; presently focused on dealing with the Québec City financial crisis and on the transition to 2. More general disclosure International Financial Reporting London requirements would have replaced the Standards. existing “comply or explain” disclosure Paris model set out in National Instrument 58- 101 Disclosure of Corporate Governance Johannesburg Practices; and

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Reasons for not Implementing the If there are any revisions to the corporate Proposal governance regime, issuers will be provided with sufficient notice to comply. Based on these comments, the CSA has decided to not implement the proposed changes. The CSA For more information on the subject of this bulletin, noted that “now is not an appropriate time to please contact the author or any member of Fasken recommend significant changes to the corporate Martineau’s Securities and Mergers & Acquisitions governance regime” and it is reconsidering whether Group. to recommend any changes. Jessica Catton The CSA stated that any further proposed changes 416 868 3510 [email protected] will be published for comment and will not take effect until the 2011 proxy season at the earliest.

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