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Proposed National Policy 51-201/Disclosure standards for public companies


Area Corporate Finance and Securities, White Collar Risk Management and Investigations


The Canadian Securities Administrators (the “CSA”) recently released for comment an important draft policy addressing a practice commonly known as “selective disclosure” whereby a public company shares material information with certain market participants, such as research analysts or institutional investors, without publicly disclosing the information. The proposed National Policy 51-201 (the “Policy”) follows the adoption by the United States Securities and Exchange Commission of Regulation FD (“Fair Disclosure”)* last year. In contrast with Regulation FD, the Policy notes that in Canada existing provincial securities legislation dealing with insider trading and tipping sets out a specific and comprehensive code which prohibits selective disclosure. Accordingly, the Policy does not promulgate any new rules but instead describes the existing timely disclosure requirements; provides interpretative guidance on the existing legislative prohibition against selective disclosure; highlights disclosure with a high degree of risk; describes materiality; and provides various “best disclosure” practices that can be adopted by public companies.

National Policy Statement No. 40 - Timely Disclosure would be rescinded when the Policy comes into force.

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