The Canadian Securities Administrators (the
"CSA") has recently issued Staff Notice
58-305 – "Status Report on the Proposed Changes to
the Corporate Governance Regime" (the
"Notice"). The Notice outlined the
CSA's reasons for deciding not to implement significant changes
to the corporate governance regime in Canada.
On December 19, 2008, the CSA sought comments on proposed
amendments to its corporate governance and audit committee regimes.
The proposed regimes would have introduced changes in three main
National Policy 58-201 Corporate Governance Principles
would have been a more principles-based policy that was broader in
scope than the current policy;
More general disclosure requirements would have replaced the
existing "comply or explain" disclosure model set out in
National Instrument 58-101 Disclosure of Corporate Governance
A principles-based approach to determining director and audit
committee member independence would have replaced the current
approach in National Instrument 52-110 Audit
In the initial proposal, Jean St-Gelais, Chair of the CSA and
President & Chief Executive Officer of the Autorité des
marchés financiers noted that the proposed governance regime
was "intended to provide greater transparency for the
marketplace regarding issuers' corporate governance practices
and to provide guidance to issuers."
The CSA received numerous comments addressing the timing of the
proposed changes. The CSA reported that the commentators noted that
issuers are presently focused on dealing with the financial crisis
and on the transition to International Financial Reporting
Reasons for not Implementing the Proposal
Based on these comments, the CSA has decided to not implement
the proposed changes. The CSA noted that "now is not an
appropriate time to recommend significant changes to the corporate
governance regime" and it is reconsidering whether to
recommend any changes.
The CSA stated that any further proposed changes will be
published for comment and will not take effect until the 2011 proxy
season at the earliest.
If there are any revisions to the corporate governance regime,
issuers will be provided with sufficient notice to comply.
For more information on the subject of this bulletin, please
contact the author or any member of Fasken Martineau's
Securities and Mergers & Acquisitions Group.
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