How to approach conflict of interest transactions: CSA notice

The securities regulators of Ontario, Québec, Alberta, Manitoba and New Brunswick have 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 deals with how to approach conflict of interest transactions, including insider bids, issuer bids, business combinations and related party transactions that cause issues for the protection of minority security holders.

The notice advises investors and traders of the five provinces’ views on special committees of independent directors and enhanced disclosure requirements. It describes how staff review conflict of interest transactions to assess compliance, including the timing and scope of reviews, the information-gathering process and potential remedies in the event of non-compliance.

The notice discusses staff views on special committees of independent directors and enhanced disclosure requirements. It addresses the role, composition and mandate of special committees as well as disclosure.

“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,” Louis Morisset, CSA chair, said in a statement on Thursday.

Read the full notice here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.