^{1 This proposed National Policy is derived from The Principles of Regulation Re: Activities of Registrants Related to Financial Institutions. This proposed National Policy is expected to be adopted as a policy in all jurisdictions represented by the CSA.}

1.1 Purpose - The purpose of this National Policy is to provide registrants with guidelines as to the process by which the Canadian securities regulatory authorities and regulators intend to review and respond to networking and selling arrangement notices in those jurisdictions in which networking or selling arrangement notices are required under Canadian securities legislation to be submitted.

PART 2 NATIONAL CLEARANCE OF NETWORKING AND SELLING ARRANGEMENT NOTICES

2.1 Form of Notice - A networking notice or selling arrangement notice may be submitted by the registrant in the form of a letter addressed to the securities regulatory authority or regulator.

2.2 Contemporaneous Delivery - In order to avoid unilateral consideration by Canadian securities regulatory authorities and regulators in each jurisdiction and to facilitate a national approach, a person or company intending to conduct a networking arrangement or selling arrangement in more than one jurisdiction is requested to send the networking notice or selling arrangement notice describing the networking arrangement or selling arrangement contemporaneously to all those jurisdictions in which it intends to conduct the networking arrangement or selling arrangement, whether or not the implementation of the networking arrangement or selling arrangement will be concurrent in all jurisdictions. If the person or company sending the networking notice or selling arrangement notice intends to conduct the networking arrangement or selling arrangement in any jurisdiction other than jurisdictions to which the networking notice or selling arrangement notice is sent, stating that fact in the networking notice or selling arrangement notice will enable the co-ordination of comments and review by the Canadian securities regulatory authorities and regulators in all relevant jurisdictions.

2.3 Principal Regulator - The person or company sending the networking notice or selling arrangement notice should state, in the networking notice or selling arrangement notice, as applicable, the jurisdiction in which the person or company maintains its principal place of business or in which the networking arrangement or selling arrangement will be primarily conducted. The Canadian securities regulatory authority or regulator in the named jurisdiction will normally act as the principal regulator for clearing the networking notice or selling arrangement notice, except where a notice is not required to be sent to the principal regulator. If the Canadian securities regulatory authority or regulator in the named jurisdiction declines to act as principal regulator, the Canadian securities regulatory authorities and regulators in the other jurisdictions to which the networking notice or selling arrangement notice was sent will decide which Canadian securities regulatory authority or regulator will act as the principal regulator and advise the person or company that submitted the networking notice or selling arrangement notice.

2.4 Review by Principal Regulator - The Canadian securities regulatory authority or regulator that is the principal regulator will review the networking notice or selling arrangement notice and use its best efforts to provide comments to the Canadian securities regulatory authorities and regulators in the other jurisdictions to which the networking notice or selling arrangement notice was sent and advise them how it intends to treat the networking notice or selling arrangement notice within 15 days of receipt of the notice by it. If it is not able to provide comments within the 15 day period it will so notify the Canadian securities regulatory authorities or regulators in the other jurisdictions to which the networking notice or selling arrangement notice was sent.

2.5 Review by Non-Principal Regulators - A Canadian securities regulatory authority or regulator that is not the principal regulator will review the networking notice or selling arrangement notice and the comments of the principal regulator and use its best efforts to provide any additional comments to the principal regulator within seven days of receipt by it of the comments from the principal regulator. A Canadian securities regulatory authority or regulator that is not the principal regulator will notify the principal regulator if it is not able to provide comments within the seven day period. If a Canadian securities regulatory authority or regulator that is not the principal regulator does not provide comments or notice of a timing delay within the seven day period it will be assumed by the principal regulator to be in agreement with the proposed treatment by the principal regulator.

2.6 Additional Information - The Canadian securities regulatory authority or regulator that is the principal regulator will correspond with the person or company sending the networking notice or selling arrangement notice for any further information required by a jurisdiction. If requested by a Canadian securities regulatory authority, the person or company should send to each Canadian securities regulatory authority and regulator to which the networking notice or selling arrangement notice was sent any follow-up information to the networking notice or selling arrangement notice.

2.7 Acceptance of Networking Notice or Selling Arrangement Notice - The Canadian securities regulatory authority or regulator that is the principal regulator will accept or reject the networking notice or selling arrangement notice in a letter that states the names of all Canadian securities regulatory authorities and regulators to which the networking notice or selling arrangement notice was sent other than those who have provided a notice to the principal regulator that they do not agree with the proposed treatment by the principal regulator.

2.8 Dealing with Non-Principal Regulators - The Canadian securities regulatory authority or regulator that is the principal regulator will advise the person or company that submitted the networking notice or selling arrangement notice of any disagreement among the Canadian securities regulatory authorities and regulators as to the acceptability of the networking notice or selling arrangement notice and advise the person or company sending the notice to deal directly with each Canadian securities regulatory authority or regulator that is not prepared to accept the networking notice or selling arrangement notice as submitted or as revised as requested by the principal regulator. The person or company that submitted the networking notice or selling arrangement notice should advise all Canadian securities regulatory authorities and regulators to which the notice was sent of a change to the networking notice or selling arrangement notice resulting from these discussions with the non-accepting Canadian securities regulatory authorities and regulators.