Securities Law & Instruments




Notice of Multilateral Policy

The Commission has adopted Multilateral Policy 34-202 Registrants Acting as CorporateDirectors and rescinded National Policy Statement No. 18 Conflict of Interest --Registrants Acting as Corporate Directors.

Multilateral Policy 34-202 comes into force and National Policy Statement No. 18 isrescinded on September 25, 1998.

Substance and Purpose of Multilateral Policy

The purpose of the Multilateral Policy (the "Policy") is to express the views of the CanadianSecurities Administrators (the "CSA") other than Quebec as to the potential for conflictsof interest arising if an individual registrant or a representative of a registrant acts as adirector of or advisor to a reporting issuer.

The Policy is an initiative of the CSA other than Quebec, and is being adopted as a policyin each of the jurisdictions represented by the CSA other than Quebec. The MultilateralPolicy is not being adopted at this time by the Commission des valeurs mobilières duQuébec. The Policy is substantially similar to former National Policy Statement No. 18 -Conflict of Interest -- Registrants Acting as Corporate Directors, which it replaces.National Policy Statement No. 18 was initially published in April 1971, and was in partbased on a statement published by The Toronto Stock Exchange on December 5, 1968.

Because this Policy is not, at this time, being adopted in all of the jurisdictions of the CSA,it is called a Multilateral Policy rather than a National Policy. However, as this Policy isbeing adopted in a number of jurisdictions, it is numbered as a national policy.

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

Summary of Policy

The Policy alerts registrants to the possibilities of a conflict of interest that can arise whena registrant is acting as a director of a reporting issuer. The Policy reminds thoseregistrants that they have a fiduciary obligation not to reveal confidential informationconcerning the reporting issuer to anyone not authorized to receive it, including theregistrant's personnel and customers. The Policy states the view of the Canadiansecurities regulatory authorities other than Québec that representatives of a registrant whoare not directors of a reporting issuer but are acting in an advisory capacity to a reportingissuer have substantially the same obligations relating to confidential information as adirector of the reporting issuer. The Policy notes that in British Columbia, a salespersonof a dealer and a registered individual of an advisor may not act as a director or officer ofa reporting issuer.

Written Comments Received by the CSA

A draft of the Multilateral Policy was published for comment in the Ontario SecuritiesCommission Bulletin on February 13, 1998 ((1998), 21 OSCB 970). Certain of the otherCSA members also published the draft for comment on or about that time. CSA membersreceived no written submissions with respect to the Multilateral Policy and no changeshave been made from the draft, other than adding section 1.7 to clarify the multilateralnature of this Policy.

Multilateral Policy

National Policy Statement No. 18 is replaced by the Multilateral Policy and will berescinded effective September 25, 1998. The text of the Multilateral Policy follows.

Text of Rescission of National Policy Statement No. 18

The text of the rescission of National Policy Statement No. 18 is:

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

DATED: October 16, 1998.



1.1 Introduction - The position of a representative of a registrant acting as a director ofor adviser to a reporting issuer is one that is fraught with the possibility of a conflictof interest. This arises more particularly in regard to questions of insiderinformation and trading, and timely disclosure.

1.2 Conflicts of Interest - The Canadian securities regulatory authorities emphasizethat all registrants should be most conscious of their responsibilities in thesesituations and weigh the burden of dealing in an ethical manner with the conflictsof interest against the advantages of acting as a director of a reporting issuer, manyshareholders of which may be clients of the registrant.

1.3 Disclosure of Information - Every director of a reporting issuer has a fiduciaryobligation not to reveal any confidential information to anyone not authorized toreceive it. Not until there is full public disclosure of the information, includingcompliance with applicable Canadian securities legislation, particularly when theinformation might have a bearing on the market price or value of the securities ofthe issuer, is a director released from the necessity of keeping information of thischaracter confidential. Any director of a reporting issuer who is a partner, director,officer or employee of a registrant should, in the view of the Canadian securitiesregulatory authorities, recognize that the director's first responsibility in this area isto the reporting issuer on whose board the director serves. A director shouldmeticulously avoid any disclosure of inside information to partners, directors,officers and employees of the registrant or to its clients.

1.4 Acting in Advisory Capacity - If a representative of a registrant is not a directorbut is acting in an advisory capacity to a reporting issuer and discussingconfidential matters, the Canadian securities regulatory authorities believe that thesame care should be taken as if that person were a director. Should the matterrequire consultation with other personnel of the registrant, adequate measuresshould, in the view of the Canadian securities regulatory authorities, be taken toguard the confidential nature of the information to prevent its misuse within oroutside the registrant.

1.5 Fitness for Registration - The failure of a registrant to comply with the standardsdescribed in this Policy may be considered by the Canadian securities regulatoryauthorities to be prejudicial to the public interest and to affect the fitness forcontinued registration of the registrant.

1.6 British Columbia Securities Legislation - In British Columbia, a salesperson ofa dealer and a registered individual of an advisor may not act as a director or officerof a reporting issuer.

1.7 Exception - For the purpose of this Policy, "Canadian securities regulatoryauthorities" means the Canadian securities regulatory authorities other than thoseof Quebec.