Canadian Securities Administrators

Abstract

On June 27, 1997, the CSA published for comment proposed National Instrument 81-104, "Commodity Pools", and proposed Companion Policy 81-104CP. The proposed National Instrument is intended to regulate publicly offered commodity pools and is designed to act in conjunction with the mutual fund regulatory regime established by National Instrument 81-102, "Mutual Funds" (NI 81-102). NI 81-102 came into force on February 1, 2000. The proposed National Instrument will exempt commodity pools from provisions in NI 81-102 where deemed appropriate and will impose additional requirements on commodity pools where deemed necessary.

Proposed changes to National Instrument 81-104 and its Companion Policy have been published. For further information, please refer to the June 2, 2000 OSC Bulletin and to related notices NIN 2000/19 (B.C) and 2000-16 (Manitoba), which have been reproduced in Volume 2 of the the Canadian Securities Law Reporter at, respectively, [Symbol Not Transcribed]222-405 and 271-032.

The Proposed Amendments also make a number of other changes to National Instrument 81-102, "Mutual Funds" ("NI 81-102"), Companion Policy 81-102CP ("81-102CP"), National Instrument 81-101, "Mutual Fund Prospectus Disclosure" ("NI 81-101"), Companion Policy 81-101CP ("81-101CP"), Form 81-101F1, "Contents of Simplified Prospectus", ("Form 81-101F1") and Form 81-101F2, "Contents of Annual Information Form" ("Form 81-101F2") (collectively, the "Rules"). The Proposed Amendments address some issues that have been brought to the attention of the CSA following the coming into force of NI 81-101 and NI 81-102 on February 1, 2000.

Proposed National Instrument 55-101

Proposed National Instrument 55-101 provides certain exemptions from the obligation to file insider reports under Canadian securities legislation. Generally speaking, the Proposed National Instrument:

- provides an exemption from the obligation to file insider reports for certain directors and senior officers of subsidiaries and of affiliates of insiders who neither hold the securities of a reporting issuer in significant amounts nor are in a position to acquire knowledge of undisclosed material information;

- permits directors and senior officers of a reporting issuer or of a subsidiary of the reporting issuer to report acquisitions of securities of the reporting issuer under automatic securities purchase plans on an annual basis in most circumstances;

- permits issuers conducting normal course issuer bids to report acquisitions of securities under such bids on a monthly basis; and

- permits directors and senior officers of a reporting issuer or a subsidiary of the reporting issuer to report changes in direct or indirect beneficial ownership of, or control or direction over securities by, such insiders pursuant to certain issuer events, such as a stock dividend, stock split, consolidation, amalgamation, reorganization or merger, at the time of their next required insider report.

Proposed changes to the proposed national instrument were recently published. For further information, please refer to the June 16, 2000 OSC Bulletin and to B.C. Notice NIN 2000/23, which has been incorporated into Volume 2 of the Canadian Securities Law Reporter at [Symbol Not Transcribed]222-409.

Proposed National Instrument 55-102 and Companion Policy

Proposed National Instrument 55-102 sets out the principal requirements and procedures relating to electronic filing of insider reports and other related information. Proposed Companion Policy 55-102CP provides notice of the decision of the applicable securities regulatory authorities and regulators to refrain from disclosing certain personal information filed in the System for Electronic Data on Insiders ("SEDI") by or on behalf of an insider. Information that will not be made publicly available includes the insider's address (except the insider's municipality, province, territory, state and/or country) telephone number, facsimile number, e-mail address and any election to receive correspondence in French or English.

For further information, please refer to the June 16, 2000 OSC Bulletin and to B.C. Notice NIN 2000/22, which has been incorporated into Volume 2 of the Canadian Securities Law Reporter at [Symbol Not Transcribed]222-408.

Proposed Changes to Proposed National Instrument 81-104 and Policy

On June 27, 1997, the CSA published for comment proposed National Instrument 81-104, "Commodity Pools", and proposed Companion Policy 81-104CP. The proposed National Instrument is intended to regulate publicly offered commodity pools and is designed to act in conjunction with the mutual fund regulatory regime established by National Instrument 81-102, "Mutual Funds" (NI 81-102). NI 81-102 came into force on February 1, 2000. The proposed National Instrument will exempt commodity pools from provisions in NI 81-102 where deemed appropriate and will impose additional requirements on commodity pools where deemed necessary.

Proposed changes to National Instrument 81-104 and its Companion Policy have been published. For further information, please refer to the June 2, 2000 OSC Bulletin and to related notices NIN 2000/19 (B.C) and 2000-16 (Manitoba), which have been reproduced in Volume 2 of the the Canadian Securities Law Reporter at, respectively, [Symbol Not Transcribed]222-405 and 271-032.

Proposed Changes to National Instruments 81-101 and 81-102

The CSA recently published for comment proposals that would:

- allow an index mutual fund to invest a percentage of its net assets in any one issuer in excess of the 10 percent concentration restriction that is prescribed by section 2.1(1) of National Instrument 81-102;

- require an index mutual fund to include specific disclosure in its simplified prospectus about its fundamental investment objective, and the risks inherent in the fund investing in securities according to an index that is itself not widely diversified;

- require a mutual fund to disclose its management expense ratio in media other than the simplified prospectus, annual information form and annual financial statements, based on a "rolling" 12 month period; and

- require a mutual fund offering multiple classes of securities to provide cover page disclosure in its simplified prospectus of the classes offered and to provide performance and financial highlight disclosure in the simplified prospectus for different classes.

The Proposed Amendments also make a number of other changes to National Instrument 81-102, "Mutual Funds" ("NI 81-102"), Companion Policy 81-102CP ("81-102CP"), National Instrument 81-101, "Mutual Fund Prospectus Disclosure" ("NI 81-101"), Companion Policy 81-101CP ("81-101CP"), Form 81-101F1, "Contents of Simplified Prospectus", ("Form 81-101F1") and Form 81-101F2, "Contents of Annual Information Form" ("Form 81-101F2") (collectively, the "Rules"). The Proposed Amendments address some issues that have been brought to the attention of the CSA following the coming into force of NI 81-101 and NI 81-102 on February 1, 2000.

For further information, please refer to Manitoba Notice 2000-17, which has been reproduced in Volume 2 of the Canadian Securities Law Reporter at [Symbol Not Transcribed]271-033 and to B.C. Notice NIN 2000/24, which has been incorporated into Volume 2 of the Canadian Securities Law Reporter at [Symbol Not Transcribed]222-410.