Securities Law & Instruments



Substance and Purpose of Proposed Multi-Jurisdictional Policy

The substance and purpose of the proposed Multi-Jurisdictional Policy (the "Policy") is to express the views of the Canadian Securities Administrators (the"CSA") other than Quebec as to the potential for conflicts of interest arising if an individual registrant or a representative of a registrant acts as a director of oradvisor to a reporting issuer.

The proposed Policy is an initiative of the CSA other than Quebec, and is to be adopted as a policy in each of the jurisdictions represented by the CSA other thanQuebec. The proposed Multi-Jurisdictional Policy is not being proposed for adoption at this time by the Commission des valeurs mobilières du Québec. Theproposed Policy is substantially similar to former National Policy Statement No. 18, which it replaces. National Policy Statement No. 18 was initially published inApril 1971, and was in part based on a statement published by The Toronto Stock Exchange on December 5, 1968.

Because this Policy is not, at this time, proposed for adoption in all of the jurisdictions of the CSA, it is called a Multi-Jurisdictional Policy rather than a NationalPolicy. However, as this Policy is being adopted in a number of jurisdictions, it is numbered as a national policy.

Summary of Proposed Policy

The proposed Policy alerts registrants to the possibilities of a conflict of interest that can arise when a registrant is acting as a director of a reporting issuer. Theproposed Policy reminds those registrants that they have a fiduciary obligation not to reveal confidential information concerning the reporting issuer to anyonenot authorized to receive it, including the registrant's personnel and customers. The proposed Policy states the view of the Canadian securities regulatoryauthorities that representatives of a registrant who are not directors of a reporting issuer but are acting in an advisory capacity to a reporting issuer havesubstantially the same obligations relating to confidential information as a director of the reporting issuer. The proposed Policy notes that in British Columbia, asalesperson, advising employee and advising partner, director or officer may not act as a director or officer of a reporting issuer.

Terms used in the proposed Policy that are defined or interpreted in a definition instrument in force in the jurisdiction should be read in accordance with thatdefinition instrument, unless the context otherwise requires.

Related Instruments

The proposed Policy is related to the provisions of Canadian securities legislation that prohibit and impose liability for trading with knowledge of a material factor material change that has not been generally disclosed and for informing others of a material fact or material change that has not been generally disclosed.

In Ontario, these provisions are contained in sections 76 and 134 of the Securities Act (Ontario) and section 175 of the Regulation made under the Act.

The proposed Policy is also related to the Ontario Securities Commission's Policy Statement No. 10.2, which will be replaced by Ontario Securities CommissionPolicy 33-601 Guidelines for Policies and Procedures Concerning Inside Information, which provides guidelines for procedures for the use of confidentialinformation by registrants.

Unpublished Materials

In proposing the Policy, the CSA has not relied on any significant unpublished study, report, decision or other written materials.


Interested parties are invited to make written submissions with respect to the proposed Policy. Submissions received by April 15, 1998 will be considered.

Submissions should be made to each of the Canadian Securities Administrators and be delivered in duplicate to:


A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certainprovinces requires that a summary of written comments received during the comment period be published, confidentiality of submissions received cannot bemaintained.

Questions may be referred to any of:


Proposed Policy

The text of the proposed Policy follows, together with a footnote that is not part of the Policy.

Text of Proposed Rescission of National Policy Statement No. 18

National Policy Statement No. 18 is replaced by the proposed Policy and will be rescinded. The text of the proposed rescission of National Policy Statement No.18 is:

"National Policy Statement No. 18 entitled "Conflict of Interest -- Registrants Acting as Corporate Directors" is rescinded."

DATED: February 13, 1998.