The Canadian Securities Administrators (CSA) staff recently issued Staff Notice 58-304 announcing its plans to undertake a broad review of National Instrument 58-101 Disclosure of Corporate Governance Practices and National Policy 58-201 Corporate Governance Guidelines. The CSA staff intends to publish its findings, together with any proposed amendments for comment, in 2008.

This is the first periodic review since the Instrument came into force on June 30, 2005. The review is intended to ensure the guidelines and disclosure requirements continue to be appropriate for issuers in the Canadian marketplace.

CSA staff indicated the application of the Policy and the Instrument to controlled companies will be considered.

The disclosure of executive compensation and related corporate governance considerations have already generated review and proposals for change in Canada, as discussed in previous issues. In the United States, the Securities and Exchange Commission (SEC) staff recently issued a report summarizing its observations after completing an initial review of the compensation and related disclosures of 350 public companies under the new executive compensation disclosure rules, which the SEC introduced in August 2006. The recent SEC staff report, as well as recent speeches by senior SEC staff officials, indicate the SEC staff’s desire to see companies provide more analysis on how and why specific compensation awards and policies are established, and to better organize, clarify and streamline the disclosure.

McCarthy Tétrault Notes:

The CSA will likely propose amendments to the Instrument and Policy intended to reflect best practices in corporate governance that have evolved in the past 30 months through regulatory, legislative and market-driven developments.