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Securities Law

NIN 95/26 - Report of Committee on Underwriting Conflicts of Interest Request for Comment [NIN - Rescinded]

Published Date: 1995-06-30
Effective Date: 1995-06-28
In the late 1980s, Alberta, British Columbia, Nova Scotia, Ontario and Québec introduced provisions to address potential new conflicts of interest that were expected following deregulation of ownership of the securities industry participants.

In the light of the industry's and regulator's experience with the application and operation of this conflict regime and the profound changes that the Canadian securities markets have undergone, the Canadian Securities Administrators ("CSA") undertook a detailed review of the issues and a reassessment of the manner and extent to which this conflict regime regulates conflicts of interest in the securities industry.

The first step in the CSA review process was the publication of a discussion paper setting out a summary of the issues and possible alternative regulatory responses available (see NIN#94/24). The CSA invited public comment on the correct range of conflicts of interest that should be addressed by the conflict regime and the appropriate regulatory mechanisms to accomplish this control.

The second stage was the establishment by the CSA of a committee to assist in the development of recommendations regarding underwriting conflicts of interest, as these were viewed as the area where there were the greatest number of concerns. The committee was chaired by a Vice-Chair of the Ontario Securities Commission and was made up of CSA appointees from Alberta, Ontario and Québec and senior representatives from various market participant groups, including dealers, issuers and institutional investors.

The committees report, and the minority report of one of its members, have now been finalized and will be published for comment in the OSC Bulletin shortly. These have not yet been considered by the CSA, and do not necessarily represent the views of the members of the CSA.

The CSA are soliciting public comment on the recommendations contained in the report. Please submit 5 copies of any comment letter on or before September 15, 1995 at the following address:

The Secretary
Ontario Securities Commission
20 Queen Street West
Toronto, Ontario
M5H 3S8

Comment letters submitted in response to a request for comment are placed in the public file in certain jurisdictions. They form part of the public record unless confidentiality is requested. Comment letters will be circulated among the securities regulatory authorities for the purposes of discussion whether or not confidentiality is requested.

Accordingly, although letters for which confidentiality is requested will not be placed in a public file, freedom of information legislation may require the securities regulatory authorities in certain jurisdictions to make the comment letter available. Persons submitting comment letters should be aware that the press and members of the public may be able to obtain access to any comment letter.

Questions may be directed to:

Tanis MacLaren
Ontario Securities Commission
Phone: (416) 593-8259
Fax: (416) 593-8283

Joëlle Saint Arnault
Commission des valeurs mobilières du Québec
Phone: (514) 873-5009 ext. 237
Fax: (514) 873-6155

A limited number of copies of both the majority and minority reports are available for pick up upon request. Requests should be directed to:

Shandie Hertslet
Information Distribution Officer
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, B.C.
V6Z 2H4

Phone: (604) 660-4844 (Greater Vancouver and outside British Columbia)
1-800-373-6393 (All other regions of British Columbia)
Fax: (604) 660-2688

DATED at Vancouver, British Columbia, on June 28, 1995.

Douglas M. Hyndman