BCN 2005/24 - Publication for Comment of Application to Amend Recognition Order of TSX Venture Exchange Inc. [BCN - Lapsed]

The Commission and the Alberta Securities Commission are publishing for comment the application of the TSX Venture Exchange Inc. (TSX Venture) to amend its recognition order to revise the definition of “independent director”. 

The application includes draft recognition orders of TSX Venture as an exchange in Alberta and British Columbia and proposed board independence standards (attached as Schedule C to the Application).

Proposed changes
Paragraph 20 of the TSX Venture’s current recognition order defines an independent director as follows:

At least 50% of the directors of TSX Venture Exchange will be independent directors, and an independent director is a director that is not

• associated with any member or participating organization of TSX Venture Exchange, as defined in TSX Venture Exchange’s by-law;
• an officer or employee of TSX Venture Exchange or its affiliates, or an associate of that officer or employee;
• a person who owns or controls, directly or indirectly, over 10% of TSX Venture Exchange; or
• an associate, director, officer or employee of any person who owns or controls, directly or indirectly, over 10% of TSX Venture Exchange (other than a director of TSX Group or TSX Inc.)

TSX Venture proposes to replace this definition with the definition in section 1.4 of Multilateral Instrument 52-110 Audit Committees, as adopted or enacted by the securities regulatory authorities of Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan and Yukon.  TSX Venture also proposes that the board of directors adopt standards, which may be amended from time to time with the prior approval of the Commission, setting out criteria to determine whether individuals are independent.  For example, an individual who is an employee or associate (as defined in the TSX Venture by-laws) or the executive officer of a member or participating organization of the TSX Venture is considered to have a material relationship with TSX Venture and therefore not considered to be independent. 

The proposed standards also provide that the board of directors may determine that an individual is independent despite having a material relationship with TSX Venture, if the board is satisfied that the relationship will not reasonably interfere with the exercise of the individual’s independent judgment.  If it makes this determination, it must disclose it in the information circular mailed to shareholders of TSX Group Inc., the indirect parent of TSX Venture, and notify the Commission in advance. 

All other aspects of the recognition order will remain unchanged.  The Commission will continue to rely on the representations, undertakings and acknowledgements made by TSX Group and TSX Inc. in September 2002.  See BC Notice 2002/36 for further information.

Comments
We are seeking comments on all aspects of the TSX Venture’s application and related documents. We invite you to send your comments in writing by June 21, 2005 to: 

Leslie Rose
Senior Legal Counsel
Capital Markets Regulation
British Columbia Securities Commission
PO Box 10142
701 West Georgia Street
Vancouver, BC   V7Y 1L2
Tel:  (604) 899-6654
(800) 373-6393 (in B.C. and Alberta)
Fax:  (604) 899-6814
lrose@bcsc.bc.ca

A diskette containing an electronic copy of the submissions (in DOS or Windows format, preferably Microsoft Word) should also be submitted.  We will be sharing your comments with the ASC and may share them with the OSC, the TSX Venture or TSX Inc.  Consequently, we will not be able to maintain their confidentiality.

May 20, 2005

Douglas M. Hyndman
Chair 

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the section Securities Law & Policy: Policies & Instruments.