Notice of Commission Approval – Material Amendments to CDS Rules – Disclosure of Participant Information – CDS Clearing and Depository Services Inc.

The commenter was in general agreement with the proposed amendments. The commenter suggested that participant's be advised prior to any disclosure of information. This would provide participants with the opportunity to clarify their position or to take action to rectify their situation.

Under the CDS Rules, CDS provides notice to a Participant prior to disclosure of information concerning that Participant, subject to various exceptions. Many of these exceptions concern business in the normal course and were part of the CDS Rules prior to the implementation of the amendments and would not require Participant clarification or action.

With the implementation of the amendments, there are three specific categories where disclosure may be made without notice to a Participant. In two of these categories, notice may not be provided due to a prohibition against the same (i.e. upon CDS Regulator request or pursuant to a statute, regulation, order or other similar operation of law). The other category pertains to a material risk event and exception from notice is applicable only if it is not in the best interests of CDS or other Participants generally.

1.2.1

Definitions

1.2.1

Definitions

For the purposes of the Legal Documents, unless otherwisespecified: specified:

For the purposes of the Legal Documents, unless otherwise specified:

"CDS Office" means an office at which CDS offers the Services to Participants.

"CDS Office" means an office at which CDS offers the Services to Participants.

"CDS Regulator" means the Autorité des marchés financiers, the Bank of Canada<<, the British Columbia Securities Commission>> or the Ontario Securities Commission.

"CDS Regulator" means the Autorité des marchés financiers, the Bank of Canada, the British Columbia Securities Commission or the Ontario Securities Commission.

"CDS Security Interests" has the meaning set forth in Rule 5.2.2.

"CDS Security Interests" has the meaning set forth in Rule 5.2.2.

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"Regulatory Body", with reference to any Person, means any board, commission, securities or commodities exchange, association or other body, organization or agency, whether governmental, professional, self-regulatory or otherwise, having jurisdiction over that Person or over any part of the business carried on by it and includes a CDS Regulator with reference to CDS.

"Regulatory Body", with reference to any Person, means any board, commission, securities or commodities exchange, association or other body, organization or agency, whether governmental, professional, self-regulatory or otherwise, having jurisdiction over that Person or over any part of the business carried on by it and includes a CDS Regulator with reference to CDS.

3.6

CONFIDENTIALITY

3.6

CONFIDENTIALITY

3.6.2

Release of Information

3.6.2

Release of Information

Each Participant authorizes CDS to release any information concerning the Participant or provided by a Participant in the circumstances listed below.

Each Participant authorizes CDS to release any information concerning the Participant or provided by a Participant in the circumstances listed below.

(a)

CDS may release such information at the request of or with the prior written consent of the Participant.

(a)

CDS may release such information at the request of or with the prior written consent of the Participant.

(b)

CDS may release such information to the auditors of CDS, of the Participant and of other Participants, as may reasonably be required to perform their duties.

(b)

CDS may release such information to the auditors of CDS, of the Participant and of other Participants, as may reasonably be required to perform their duties.

(c)

CDS may release such information to the legal counsel of CDS, as may reasonably be required to perform their duties.

(c)

CDS may release such information to the legal counsel of CDS, as may reasonably be required to perform their duties.

(d)

CDS may release such information as is legally required to be provided to a CDS Regulator or requested in writing by a CDS Regulator within the regulatory authority of the requesting CDS Regulator. When a CDS Regulator requests the disclosure of such information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request coincident with making the disclosure unless the request prohibits such notice.

(d)

CDS may release such information as is legally required to be provided to a CDS Regulator or requested in writing by a CDS Regulator within the regulatory authority of the requesting CDS Regulator. When a CDS Regulator requests the disclosure of such information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request coincident with making the disclosure unless the request prohibits such notice.

(e)

CDS may release such information if requested by the Issuer of Securities held for the Participant or by any other Person and if CDS is reasonably satisfied that such information is sought for a purpose concerning an effort to influence the voting by Security holders of the Issuer, an offer to acquire Securities of the Issuer or any other matter relating to either the affairs of the Issuer or Transactions in the Securities of the Issuer effected by the Participant. Such information shall be limited to information with respect to the Securities held for the Participant and shall not identify any client or customer of the Participant.

(e)

CDS may release such information if requested by the Issuer of Securities held for the Participant or by any other Person and if CDS is reasonably satisfied that such information is sought for a purpose concerning an effort to influence the voting by Security holders of the Issuer, an offer to acquire Securities of the Issuer or any other matter relating to either the affairs of the Issuer or Transactions in the Securities of the Issuer effected by the Participant. Such information shall be limited to information with respect to the Securities held for the Participant and shall not identify any client or customer of the Participant.

(f)

CDS may release such information as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of CDS, jurisdiction over CDS. When CDS is required to disclose such information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request coincident with making the disclosure unless the terms of any applicable statute, regulation, ruling or order prohibit such notice.

(f)

CDS may release such information as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of CDS, jurisdiction over CDS. When CDS is required to disclose such information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request coincident with making the disclosure unless the terms of any applicable statute, regulation, ruling or order prohibit such notice.

(g)

CDS may release such information pursuant to any statutory or regulatory requirement including National Instrument 54-101 Communication with Beneficial Owners of a Reporting Issuer (as it may be reformulated from time to time) or any similar policy, instrument or Rule adopted or made by the Canadian Securities Administrators.

(g)

CDS may release such information pursuant to any statutory or regulatory requirement including National Instrument 54-101 Communication with Beneficial Owners of a Reporting Issuer (as it may be reformulated from time to time) or any similar policy, instrument or Rule adopted or made by the Canadian Securities Administrators.

(h)

CDS may release such information to any securities exchange, commodities exchange, alternative trading system, securities depository, securities clearing agency, payment clearing system or self-regulatory organization of which the Participant is a member or the services of which the Participant uses in connection with its participation in CDS, or to any insurer of the Participant including the Canadian Investor Protection Fund or the Canada Deposit Insurance Corporation. CDS shall request the recipient to treat such information as confidential.

(h)

CDS may release such information to any securities exchange, commodities exchange, alternative trading system, securities depository, securities clearing agency, payment clearing system or self-regulatory organization of which the Participant is a member or the services of which the Participant uses in connection with its participation in CDS, or to any insurer of the Participant including the Canadian Investor Protection Fund or the Canada Deposit Insurance Corporation. CDS shall request the recipient to treat such information as confidential.

(i)

CDS may release such information to any self-regulatory organization of which the Participant is a member and to the primary Canadian Regulatory Body for the Participant in regards to compliance with Rule 10.2.3(b).

(i)

CDS may release such information to any self-regulatory organization of which the Participant is a member and to the primary Canadian Regulatory Body for the Participant in regards to compliance with Rule 10.2.3(b).

(j)

CDS may release such information that is in a statistical, summary or other format, provided the information in that format does not specifically identify a particular Participant, or, if the information concerns debt Securities, provided the information in that format does not identify any industry group.

(j)

CDS may release such information that is in a statistical, summary or other format, provided the information in that format does not specifically identify a particular Participant, or, if the information concerns debt Securities, provided the information in that format does not identify any industry group.

(k)

CDS may release such information (i) to a CDS Regulator, (ii) to any other Regulatory Body having, in the opinion of CDS, jurisdiction over CDS, (iii) to the primary Regulatory Body for the Participant, or (iv) to other Participants, concerning an event or circumstance involving the Participant that CDS considers raises concerns about potential material risk in the Services, including a material breach of the Rules or Procedures by the Participant, or a Loss of Securities or Participant Loss caused or contributed to by the Participant. The following conditions shall apply to such release of confidential information: (i) CDS shall give notice to the Participant of the proposed disclosure coincident with making the disclosure, if such notice is, in the determination of CDS, not against the best interests of CDS and Participants generally; (ii) CDS shall determine whether the information will be released to all other Participants or only to a select group of Participants, such as members of a Credit Ring, who are particularly affected by the event or circumstance; (iii) CDS shall identify the Participant involved in the event or circumstance to a CDS Regulator or any other Regulatory Body; and (iv) CDS shall identify the Participant involved in the event or circumstance to other Participants only if, in its judgment, such identification is necessary to enable the other Participants to respond to the potential risk. Where CDS discloses the identity of a Participant involved in the event or circumstance to other Participants, the Participant receiving such disclosure shall keep the identity of the Participant confidential and shall not further disclose the identity to another party unless compelled by law.

(k)

CDS may release such information (i) to a CDS Regulator, (ii) to any other Regulatory Body having, in the opinion of CDS, jurisdiction over CDS, (iii) to the primary Regulatory Body for the Participant, or (iv) to other Participants, concerning an event or circumstance involving the Participant that CDS considers raises concerns about potential material risk in the Services, including a material breach of the Rules or Procedures by the Participant, or a Loss of Securities or Participant Loss caused or contributed to by the Participant. The following conditions shall apply to such release of confidential information: (i) CDS shall give notice to the Participant of the proposed disclosure coincident with making the disclosure, if such notice is, in the determination of CDS, not against the best interests of CDS and Participants generally; (ii) CDS shall determine whether the information will be released to all other Participants or only to a select group of Participants, such as members of a Credit Ring, who are particularly affected by the event or circumstance; (iii) CDS shall identify the Participant involved in the event or circumstance to a CDS Regulator or any other Regulatory Body; and (iv) CDS shall identify the Participant involved in the event or circumstance to other Participants only if, in its judgment, such identification is necessary to enable the other Participants to respond to the potential risk. Where CDS discloses the identity of a Participant involved in the event or circumstance to other Participants, the Participant receiving such disclosure shall keep the identity of the Participant confidential and shall not further disclose the identity to another party unless compelled by law.

(l)

CDS may release such information to other Participants which are involved in litigation brought by or against CDS as the operator of the CDSX system or the provider of other Services to Participants, provided that (i) such information is relevant to the litigation, (ii) CDS shall give prior notice to the Participant of the proposed disclosure, and (iii) the Participant shall be given the opportunity to appeal the proposed disclosure pursuant to Rule 3.2.3. Participants receiving such disclosure shall keep the identity of other involved Participants confidential and shall not further disclose the identity of other involved Participants to another party unless compelled by law.

(l)

CDS may release such information to other Participants which are involved in litigation brought by or against CDS as the operator of the CDSX system or the provider of other Services to Participants, provided that (i) such information is relevant to the litigation, (ii) CDS shall give prior notice to the Participant of the proposed disclosure, and (iii) the Participant shall be given the opportunity to appeal the proposed disclosure pursuant to Rule 3.2.3. Participants receiving such disclosure shall keep the identity of other involved Participants confidential and shall not further disclose the identity of other involved Participants to another party unless compelled by law.

In releasing any information pursuant to this Rule, CDS shall take reasonable steps to avoid releasing any information that may identify a particular client or customer of a Participant, unless (i) such information is requested in writing by the requestor and the requestor has, in the opinion of CDS, the legal right to obtain such information; or (ii) with respect to information released under subsection (k), such information is necessary to enable Participants to respond to the potential risk.

In releasing any information pursuant to this Rule, CDS shall take reasonable steps to avoid releasing any information that may identify a particular client or customer of a Participant, unless (i) such information is requested in writing by the requestor and the requestor has, in the opinion of CDS, the legal right to obtain such information; or (ii) with respect to information released under subsection (k), such information is necessary to enable Participants to respond to the potential risk.