News Release

Toronto – Canadian securities regulators have adopted a policy statement that provides guidance and best practices on corporate disclosure and assists public companies in avoiding selective disclosure.

“It is fundamental that everyone investing in securities should have equal and timely access to information that may affect their investment decisions,” said Doug Hyndman, CSA Chair. “The law has required this for many years but we are giving companies fresh guidance to help them avoid selectively disclosing material information to analysts, institutional investors, investment dealers and market professionals.”

Selective disclosure occurs when a company discloses material non-public information to one or more individuals or companies and not broadly to the investing public. Selective disclosure can create opportunities for insider trading and also undermines retail investors’ confidence in the marketplace.

National Policy 51-201 Disclosure Standards provides guidance on best disclosure practices in a difficult area. “We need to strike the right balance between business pressures and the need for information to be broadly available to all investors,” added Hyndman. “Our recommendations are not intended to be prescriptive. We encourage companies to adopt the suggested measures, but flexibly and sensibly to fit their particular situation.”

Securities legislation presently prohibits tipping and insider trading. Tipping occurs when someone provides information about a material fact or a material change (privileged information under Québec legislation) before that information has been generally disclosed. Insider trading involves someone buying or selling securities with knowledge of a material fact or material change about the issuer that has not been generally disclosed. The policy includes best practices to help issuers and their insiders avoid situations that could lead to tipping or insider trading.

The new policy indicates that selective disclosure violations can occur in a variety of settings, including one-on-one discussions, such as analyst meetings, in industry conferences and other types of private meetings. “Companies should be very sensitive to the risks involved in private meetings with analysts”, said Hyndman.

The timely disclosure requirements and prohibitions against selective disclosure are substantially similar everywhere in Canada, but there are differences among the provinces and territories, so companies should carefully review the legislation which is applicable to them for the details.

The policy is available on CSA members’ Web sites, at the addresses listed below.

Joni Delaurier Alberta Securities Commission 403-297-4481 www.albertasecurities.com	Michael Bernard B.C. Securities Commission 604-899-6524 1-800-373-6393 (B.C. & Alberta only) www.bcsc.bc.ca
Ainsley Cunningham Manitoba Securities Commission 204-945-4733 1-800-655-5244 (Manitoba only) www.msc.gov.mb.ca	Eric Pelletier Ontario Securities Commission 416-595-8913 1-877-785-1555 www.osc.gov.on.ca
Barbara Timmins Commission des valeurs mobilières du Québec 514-940-2176 1-800-361-5072 (Quebec only) www.cvmq.com