For Immediate Release
July 27, 2017

Canadian securities regulators publish guidance on conflict of interest transactions

Toronto – The securities regulatory authorities in Ontario, Québec, Alberta, Manitoba and New Brunswick (the participating jurisdictions) today published CSA Multilateral Staff Notice 61-302 Staff Review and Commentary on Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

The notice outlines the approach used to review material conflict of interest transactions, including insider bids, issuer bids, business combinations and related party transactions that give rise to concerns regarding the protection of minority security holders. The notice also advises market participants of the participating jurisdictions’ views on special committees of independent directors and enhanced disclosure requirements.

“Our regulatory framework for conflict of interest transactions is designed to protect minority security holders when a related party of the issuer, who may have superior access to information or significant influence, is involved in such a transaction,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.

The notice describes how staff review conflict of interest transactions to assess compliance with Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101), including the timing and scope of such reviews, the information-gathering process and potential remedies in the event of non-compliance.  

The notice also contains a discussion of staff’s views on special committees of independent directors and enhanced disclosure requirements based on the requirements of MI 61-101 and associated guidance, decisions of securities regulatory authorities, and issues identified in reviews of material conflict of interest transactions. The discussion addresses the role, composition and mandate of special committees, and disclosure regarding the background, approval process and fairness opinions for conflict of interest transactions.

The notice can be found on the websites of the participating jurisdictions.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

For more information:

Kristen Rose
Ontario Securities Commission

Hilary McMeekin
Alberta Securities Commission

Alison Walker
British Columbia Securities Commission

Sylvain Théberge
Autorité des marchés financiers

Jason (Jay) Booth
Manitoba Securities Commission

Andrew Nicholson
Financial and Consumer Services
Commission, New Brunswick

David Harrison
Nova Scotia Securities Commission

Steve Dowling
Government of Prince Edward Island,
Superintendent of Securities

John O’Brien
Office of the Superintendent
of Securities
Newfoundland and Labrador

Rhonda Horte
Office of the Yukon Superintendent
of Securities

Jeff Mason
Nunavut Securities Office

Tom Hall
Office of the Superintendent of
Securities, Northwest Territories

Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan