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CSA Invites Reaction to Canada’s First Income Trust Policy


Area REITs and Income Securities


On October 24, 2003, the Canadian Securities Administrators (CSA) published for comment National Policy 41-201 – Income Trusts and Other Indirect Offerings.   The Policy, which is the first regulatory instrument that focuses directly on the income trust structure, provides guidance and clarification to market participants by expressing the regulators’ views on how the existing securities regulatory framework should apply to income trusts and other indirect offerings.   Comments on the Policy are due by December 23, 2003.

The Policy addresses a number of issues of central and fundamental importance to the income trust market, such as prospectus disclosure, continuous disclosure, liability, and sales and marketing materials, and its potential impact is significant.

Moreover, the Policy deals not only with income trusts but with any form of “indirect offering”, and its provisions could have application to offerings undertaken by more conventional non-trust issuers where the proceeds are used to fund a business acquisition from a vendor not at arm’s length from, or  “involved” with, the public issuer.

The Goodmans Income Funds Group has produced a webcast presentation outlining the key elements of the Policy and what it means for the income trust sector and the capital markets generally.  The webcast can be accessed at http://webevents.broadcast.com/cnw/goodmans

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