Canadian Securities Law Online

CNSX receives offshore securities market status from SEC

Stikeman Elliott LLP — Tue, 09 Mar 2010 14:07:06 -0500

The Canadian National Stock Exchange (CNSX) announced yesterday that the U.S. Securities and Exchange Commission (SEC) has designated it a "Designated offshore securities market" under Regulation S of the Securities Act of 1933. The designation applies to CNSX and Pure Trading.

Regulation S allows companies to bypass SEC registration requirements where offerings and sales of securities occur outside the U.S. The exemptions were created in order to encourage investments in U.S. companies by non-U.S. investors and provide safe harbours with respect to offers and sales by issuers, distributors and affiliates under Rule 903 and offshore resales under Rule 904. Regulation S, however, imposes a number of resale restrictions to ensure sales to a U.S. person do not occur.

The SEC designation, however, means that restricted securities may now generally be resold on CNSX or Pure Trading without the seller having to determine whether the buyer is in the U.S. or a U.S. person, as would otherwise have been the case.

CSA issue orders exempting registrants from certain provisions of NI 31-103

Stikeman Elliott LLP — Mon, 08 Mar 2010 11:14:08 -0500

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On February 26, 2010, members of the Canadian Securities Administrators (CSA) each issued omnibus/blanket orders in response to applications requesting exemptions from certain provisions of National Instrument 31-103 Registration Requirements and Exemptions (31-103). 31-103, together with amendments to related instruments and policies, came into effect on September 28, 2009 (the Effective Date). Notice of these orders was provided under CSA Staff Notice 31-315 Omnibus/Blanket Orders exempting registrants from certain provisions of National Instrument 31-103 Registration Requirements and Exemptions, which was also published on February 26, 2010. The orders are summarized below.

Continuation of transition/grandfathering provisions for registrants adding jurisdiction

Each regulator issued an order that provides a person or company adding a jurisdiction to his, her or its registration, with the benefit of certain grandfathering and transition provisions provided under Part 16 of 31-103 in that additional jurisdiction. Specifically, those grandfathering and transition provisions that deal with proficiency, capital, insurance, relationship disclosure information, referral arrangements, dispute resolution service and client statement requirements were included in the order. To rely on the order, the registrant must: (i) have been continuously registered in a jurisdiction in Canada since the Effective Date; (ii) remain registered in that jurisdiction during its reliance on the order; (iii) be exempt under the relevant section of Part 16 in that jurisdiction; and (iv) register, after the Effective Date, in the same category of registration (and in the case of an individual, with the same sponsoring firm) in an additional jurisdiction.

Exemption from chief compliance officer proficiency requirements for portfolio manager adding a category

Under Part 3 of 31-103, an individual who satisfies the proficiency requirements for a chief compliance officer (CCO) of a portfolio manager (PM), also satisfies the proficiency requirements for a CCO of a mutual fund dealer (MFD), exempt market dealer (EMD) and investment fund manager (IFM). Each regulator issued an order providing a CCO of a PM whose proficiency is grandfathered under subsection 16.9(2) of 31-103 with an exemption from the proficiency requirements applicable to a CCO of an MFD, EMD or IFM where the firm was registered as a PM on the Effective Date and the individual was designated as the firm’s CCO on the Effective Date and remains so registered.

Exemption from dealing representative proficiency requirements for portfolio manager adding mutual fund dealer or exempt market dealer category

Under Part 3 of 31-103, an individual who satisfies the proficiency requirements for an advising representative of a PM also satisfies the proficiency requirements for a dealing representative of an MFD and EMD. Each regulator issued an order providing an advising representative of a PM whose proficiency is grandfathered under subsection 16.10(1) of 31-103 with an exemption from the proficiency requirements applicable to a dealing representative of an MFD and EMD.

Exemption from time limits on examination requirements for certain dealing representatives

Pursuant to section 16.10 of 31-103, a dealing representative of a scholarship plan dealer (SPD) registered since the Effective Date and, in Ontario and Newfoundland and Labrador, a dealing representative of an EMD registered since the Effective Date, has until September 28, 2010 to meet applicable proficiency requirements under Part 3 of 31-103. Section 3.3 of 31-103 deems an individual to not have passed an examination or successfully completed a program unless such examination or program was passed or completed within a prescribed period of time prior to the individual applying for registration. Each regulator issued an order exempting dealing representatives of an SPD registered since the Effective Date and, in Ontario and Newfoundland and Labrador, dealing representatives of an EMD registered since the Effective Date, from the time limits under section 3.3 of 31-103.

Exemption from client notification requirements under section 14.5 of 31-103 for certain registrants with physical place of business in local jurisdiction

Section 14.5 of 31-103 requires a registrant with no head office in a local jurisdiction to provide its clients with prescribed written disclosure relating to the potential difficulty for the client to obtain civil remedies against the registrant in the local jurisdiction. Each regulator issued an order that exempts a registrant with a head office in Canada and a physical place of business in the local jurisdiction from the client disclosure requirements under section 14.5.

Exemption from requirement to establish whether client an insider under section 13.2 of 31-103 for mutual fund dealers

Subsection 13.2(2)(b) of 31-103 requires that a registrant take reasonable steps to establish whether a client is an insider of a reporting issuer or any other issuer whose securities are publicly traded. Each regulator issued an order exempting mutual fund dealers from this requirement.

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Previously issued omnibus/blanket orders

Transitional relief for previously registered international dealers in respect of Canadian debt securities

On September 25, 2009, the Ontario Securities Commission (OSC) issued an order, effective in Ontario and Newfoundland and Labrador, providing certain transitional relief under 31-103 to dealers formerly registered as international dealers in Ontario and/or Newfoundland. The order permits dealers formerly registered as international dealers to continue to trade in Canadian debt securities outside of a distribution of the securities with designated institutions (as that term was defined prior to the Effective Date under section 204 of Ontario Regulation 1015) for a transition period of one year, expiring on September 28, 2010. The order also provides for a transition period of six months, expiring March 31, 2010 for dealers relying on the order to provide clients with prescribed written disclosure relating to clients’ potential difficulty in obtaining civil remedies against the registrant in the local jurisdiction. To rely on the order, a dealer must: (i) have been formerly registered as an international dealer; (ii) have filed with the regulators a Form 31-103F2 Submission to Jurisdiction and Appointment of Agent for Service, together with an indication of its intention to rely on the order; and (iii) fulfill the conditions set out in subsection 8.18(3) (a) – (d) of 31-103.

Transitional relief for exempt market dealers in respect of financial reporting and client statements

On September 28, 2009, the OSC issued an order, effective in Ontario and Newfoundland and Labrador, providing certain transitional relief to former limited market dealers “mapped-over” to the EMD category. (There was an amendment to this order on February 19, 2010 to correct a drafting oversight). The order provides a transition period of one year, expiring on September 28, 2010, to former limited market dealers “mapped-over” to the EMD category from the financial reporting requirements under subsection 12.12(1) of 31-103. This transitional relief can only be relied upon if the EMD is not registered in any other category of registration in Ontario and Newfoundland and Labrador, other than a former international adviser “mapped-over” to the PM category. The order also provides a transition period of two years, expiring on September 28, 2011, to former limited market dealers “mapped-over” to the EMD category from the client statement requirements under section 14.14 of 31-103. This transitional relief can only be relied upon if the EMD is not registered in any other category of registration in Ontario and Newfoundland and Labrador, other than a “mapped-over” MFD, investment fund manager, or former international adviser “mapped-over” to the PM category.

CSA and IIROC hosting consultation forum on dark pools and market structure

Stikeman Elliott LLP — Fri, 05 Mar 2010 16:00:31 -0500

The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) are hosting a forum on March 23 at the Design Exchange in Toronto to discuss Consultation Paper 23-404, "Dark Pools, Dark Orders, and Other Developments in Market Structure in Canada", published in September 2009. Interested parties can register on the IIROC website.

CCGG makes submission as part of Parliamentary CBCA review

Stikeman Elliott LLP — Fri, 05 Mar 2010 13:15:04 -0500

The Canadian Coalition for Good Governance (CCGG) submitted a brief to the House of Commons' Standing Committee on Industry, Science and Technology in February regarding the Committee's five-year review of the Canada Business Corporations Act (CBCA). The brief follows the CCGG's appearance before the Committee in November 2009.

According to the CCGG's brief, governance requirements for public companies in Canada have not kept pace with best practices. As such, the CCGG recommends enshrining basic democratic and governance norms for public companies into the CBCA. Specifically, the CCGG recommends that the CBCA be amended to: (i) prohibit slate voting; (ii) require a majority voting standard for director elections; (iii) require annual director elections for all CBCA public companies; (iv) require public companies to disclose the detailed results of shareholder votes for matters on the ballot; (v) give significant shareholders access to the proxy circular; (vi) require all shareholders to be treated equally in the proxy process, irrespective of whether they want to protect the privacy of their information; (vii) facilitate "notice and access", whereby shareholders would be able to access documents from companies' websites; (viii) generally require the separation of the roles of CEO and Chair of the Board; (ix) require shareholder approval for significantly dilutive acquisitions; and (x) give shareholders more meaningful ways to resolve claims under the oppression remedy.

It is unclear what steps the Committee will take at this point, however, as Parliament has only just resumed after prorogation and no activities are yet listed on its schedule.

SEC approves new short selling rule

Stikeman Elliott LLP — Fri, 05 Mar 2010 11:31:43 -0500

The U.S. Securities and Exchange Commission (SEC) adopted a new short selling rule on February 24, 2010. The new rule is intended to promote market stability and preserve investor confidence during periods of stress and volatility by restricting short sellers from being able to drive the price of a stock further down when it is already experiencing downward pressure. Short selling involves the sale of stock that an investor does not own or has borrowed, where the investor intends to profit by buying the stock back at a price that is lower than the price of the short sale. While acknowledging that short selling may be useful in that it can promote market liquidity and pricing efficiency, the SEC cautions that it may also be used to "improperly drive down the price of a security or to accelerate a declining market in a security."

The SEC considered various options over the course of the last year to address its concerns regarding short selling and has decided to implement an alternative uptick rule that would restrict short selling when the price of a security has fallen more than 10% in one day. This restriction would remain in effect for the remainder of the day as well as the next day and under such a scenario, short selling would only be permitted if the price of the security was above the current national best bid. The rule will apply to all equity securities that are listed on a national securities exchange, whether traded on an exchange or in the over-the-counter market, and requires trading centers to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent the execution or display of a prohibited short sale. The rule will become effective 60 days after its publication in the Federal Register, while market participants will have six months to comply with its requirements.

SEC amends proxy rules to allow e-proxy flexibility

Stikeman Elliott LLP — Fri, 05 Mar 2010 10:00:45 -0500

On February 22, the U.S. Securities and Exchange Commission (SEC) announced that it was amending its proxy rules to improve the "notice and access" model for furnishing proxy materials to shareholders. Under the model, issuers are permitted to post their proxy materials on the internet and send shareholders a "Notice of Internet Availability of Proxy Materials" (a Notice), directing shareholders to the website where the proxy materials may be found, in lieu of delivering a full set of proxy materials in paper accompanied by the above Notice. While the notice and access model, adopted in 2007, was intended to promote the use of the internet as a cost-efficient and reliable means of making proxy materials available to shareholders, the SEC has found lower shareholder response rates to proxy solicitations when the notice-only option is employed.

The SEC attributes the lower response rate in cases where the notice-only option is used to confusion among investors regarding the operation of the notice and access model. Thus, issuers and other soliciting persons will be provided additional flexibility under the amendments with respect to the format and content of the Notice, including being able to provide additional materials explaining the e-proxy rules, rather than being restricted to inclusion of the boilerplate-type language currently set out by the rules. Changes are also being made with respect to the time by which a soliciting person other than an issuer must send its Notice to shareholders. The effective date of the amendments, first proposed in October 2009, is March 29, 2010.

In addition to the introducing the above amendments, the SEC also published an Alert describing changes that went into effect in January 2010 eliminating discretionary voting by brokers in the election of directors and the effects of these changes on proxy voting. The SEC also launched a new website providing investors with general information respecting, among other things, proxy voting and e-proxy rules.

Budget 2010 provides update respecting Canadian securities regulator

Stikeman Elliott LLP — Thu, 04 Mar 2010 19:19:44 -0500

Budget 2010, delivered this afternoon by Finance Minister Jim Flaherty, contains an update of the Canadian government's intention with respect to the establishment of a federal securities regulator and implementation of a federal securities act. Specifically, the budget sets a three-year target for the establishment of a federal securities regulator and identifies key next steps. These steps include: (i) the release of a draft Canadian securities bill this Spring; (ii) referral of the draft bill to the Supreme Court for an opinion as to Parliament's authority under the Constitution with respect to federal regulation of the securities sector; (iii) delivery of an organizational and administrative transition plan by the Canadian Securities Transition Office this Summer; and (iv) ongoing work on rules and regulations that will complement the federal securities act. While inviting and encouraging all jurisdictions to join the federal effort, Budget 2010 states that the government will move forward with a majority of provinces and territories through voluntary participation.

FINRA's TRACE now includes government agency debt and primary bond market

Stikeman Elliott LLP — Wed, 03 Mar 2010 09:39:24 -0500

As of March 1, the U.S. Financial Industry Regulatory Authority (FINRA) Trade Reporting and Compliance Engine (TRACE) will now include debt issued by federal government agencies, government corporations and government-sponsored enterprises as well as primary market transactions in new corporate debt issues. The expansion of TRACE represents a 50% increase in the number of debt securities subject to its reporting requirements.

Saskatchewan joins other provinces in providing relief for exempt market dealers

Stikeman Elliott LLP — Tue, 02 Mar 2010 17:00:40 -0500

On February 25, Saskatchewan joined Alberta, British Columbia and Manitoba in issuing an order making available certain limited trade-based registration exemptions to persons that would otherwise be required to register as exempt market dealers in the province. The order is most similar to that of Alberta, as it includes a condition that the person relying on the exemption must not have provided financial services to the purchaser at any time other than in connection with a prospectus-exempt distribution under the relevant sections, while also including language that the person relying on the exemption must not be registered or required to be registered. A companion policy providing guidance was also released.

The Northwest Territories, Nunavut and the Yukon Territory are expected to issue similar orders.

Provincial/Territorial Council of Ministers of Securities Regulation releases 2009 Progress Report

Stikeman Elliott LLP — Tue, 02 Mar 2010 11:26:40 -0500

The Provincial/Territorial Council of Ministers of Securities Regulation (Council) issued its 2009 Progress Report yesterday outlining the various regulatory activities undertaken last year across Canadian jurisdictions. The issues considered in the Council's Progress Report include the federal transition to a single securities regulator, the upcoming changeover to IFRS and the introduction in various jurisdictions of harmonized securities transfer legislation.

The Progress Report also provides a preview of initiatives that the Council anticipates the CSA will undertake during the next year, namely, a new rule dealing with oversight of credit rating organizations, the development of a harmonized regulatory framework for derivatives, including OTC derivatives, hedge fund regulation and executive compensation requirements.

OSC announces new Investor Advisory Panel

Stikeman Elliott LLP — Mon, 01 Mar 2010 14:45:31 -0500

On February 26, the Ontario Securities Commission (OSC) announced the creation of an Investor Advisory Panel in order to afford investors better representation in the OSC's consideration of various issues. Specifically, the panel will provide input on such things as OSC proposals, concept papers and the annual statement of priorities. The panel will consist of seven members representing a broad range of investors and according to the OSC, applications for membership will be solicited within a few weeks. The Canadian Foundation for Advancement of Investor Rights (FAIR Canada), meanwhile, welcomed the OSC's announcement and provided a number of recommendations to the OSC in its formulation of the panel.

Bank shareholders approve executive pay

Stikeman Elliott LLP — Mon, 01 Mar 2010 13:51:12 -0500

On February 25, CIBC shareholders voted in favour of executive pay in what is believed to be the first "say on pay" vote at a Canadian financial services company. As we wrote in October 2009, Canada's largest financial services companies agreed last year to allow shareholders to vote on the same executive compensation resolution across all participating firms. Similar shareholder votes are expected over the coming weeks at the other major financial services institutions.

British Columbia and Manitoba provide relief for exempt market dealers

Stikeman Elliott LLP — Fri, 26 Feb 2010 16:43:00 -0500

The British Columbia Securities Commission (BCSC) issued an order today making certain limited trade-based registration exemptions to persons that would otherwise be required to register as exempt market dealers in BC. Meanwhile, the Manitoba Securities Commission issued a similar order. As previously discussed, with the implementation of the new registration regime and National Instrument 31-103 Registration Requirements and Exemptions, trade-based registration exemptions that parallel prospectus exemptions available under National Instrument 45-106 Prospectus and Registration Exemptions are to be repealed on March 27, 2010.

Pursuant to the orders, effective March 27, 2010, an exemption from the EMD registration requirement will be available in both B.C. and Manitoba for persons trading in securities in reliance on certain prospectus exemptions under NI 45-106, specifically, section 2.3 ("accredited investors"), section 2.5 ("family, friends and business associates"), section 2.9 ("offering memorandum") and section 2.10 ("minimum investment amount").

The orders, however, apply only where certain conditions are met. Specifically, the person or company seeking to rely on the exemption in B.C.: (i) must not be registered in any jurisdiction, including a foreign jurisdiction; (ii) must not have provided advice to the purchaser with respect to suitability; (iii) must obtain from the purchaser a signed risk acknowledgement in the form prescribed by the blanket order; (iv) must not hold or have access to the purchaser's assets; and (v) must electronically file with the BCSC a current or updated information report in the prescribed form within ten days of relying on the exemption.

The Manitoba order, meanwhile, also includes a requirement, like the recent Alberta order published earlier this month, that the person relying on the exemption not have provided financial services to the purchaser at any time other than in connection with a prospectus-exempt distribution under the relevant sections. However, the Manitoba and B.C. orders do not include language found in the Alberta order imposing the express condition that the person relying on the exemption must not be registered or required to be registered. The BCSC And MSC also released accompanying guidance respecting their respective orders (see B.C.'s companion policy and Manitoba's guidance notice).

B.C. and Manitoba, which are the second and third of the "North West" jurisdictions to issue such orders after Alberta, are expected to be further joined by Saskatchewan, the Northwest Territories, Nunavut and the Yukon Territory, whose regulators have also announced their intention to issue similar orders.

For more information on the impact of the new registration regime on dealers trading in the exempt market, see our July 2009 publication: "Impact on Limited Market Dealers and Unregistered Dealers Trading in the Exempt Market".

CSA publish blanket orders exempting registrants from provisions of registration regime

Stikeman Elliott LLP — Fri, 26 Feb 2010 16:19:30 -0500

The Canadian Securities Administrators (CSA) today published an omnibus set of blanket orders exempting registrants from certain provisions of National Instrument 31-103. The orders, which take effect on February 26, 2010, cover the following areas:

The continuation of transition/grandfathering provisions for persons and companies adding a jurisdiction;
Relief from for the chief compliance officer (CCO) proficiency requirements for portfolio managers adding a category;
Relief from proficiency requirements for portfolio managers adding registration in the mutual fund dealer or exempt market dealer category;
Relief from the time limits on examination requirements for dealing representatives of exempt market dealers (in Ontario and Newfoundland and Labrador only) and scholarship plan dealers in all jurisdictions who were registered when NI 31-103 came into force;
Relief from client notification requirements under section 14.5 of NI 31-103 for certain Canadian registrants with head offices outside of the local jurisdiction;
Relief from requirements to establish whether a client is an insider under section 13.2(2)(b) of NI 31-103 for mutual fund dealers.

SEC approves statement on global accounting standards and IFRS convergence

Stikeman Elliott LLP — Fri, 26 Feb 2010 11:17:18 -0500

The SEC issued a statement on Wednesday outlining its position with respect to global accounting standards. Specifically, the SEC stated that it supports "the objective of financial reporting in the global markets pursuant to a single set of high-quality globally accepted accounting standards." It recognizes, however, that incorporating IFRS into the U.S. financial reporting environment would be a large task and recognizes the need for deliberation as well as a sufficient transition time to prepare for such a change.

Thus, the SEC directed its staff to develop and execute a work plan to enhance the SEC's understanding and assist it in making a decision in 2011 regarding the incorporation of IFRS into the financial reporting system for U.S. issuers. Specifically, the work plan sets out the following areas of concern: (i) sufficient development and application of IFRS for the U.S. domestic reporting system; (ii) the independence of standard setting for the benefit of investors; (iii) investor understanding and education regarding IFRS; (iv) examination of the U.S. regulatory environment that would be affected by a change in accounting standards; (v) the impact on issuers; and (vi) human capital readiness.

Considering the time required to successfully implement a change in financial reporting, the SEC stated that should it make the decision in 2011 to incorporate IFRS, the earliest that U.S. companies would report under such a system would be approximately 2015 or 2016, although SEC staff have been asked to further evaluate this timeline as part of the work plan.

IOSCO publishes periodic disclosure principles

Stikeman Elliott LLP — Thu, 25 Feb 2010 10:21:05 -0500

On Monday, the International Organization of Securities Commissions (IOSCO) published a final report entitled "Principles for Periodic Disclosure by Listed Entities". The report is intended to provide securities regulators with a framework for establishing or reviewing their periodic disclosure regimes. According to the report, its principles-based format "allows for a wide range of application and adaptation by securities regulators."

Specifically, the report identifies the following principles as being "essential" for periodic disclosure regimes: (i) periodic reports should contain relevant information; (ii) for those periodic reports in which financial statements are included, the persons responsible for the financial statements provided should be clearly identified and should state that the financial information provided is fairly presented; (iii) the issuer's internal control over financial reporting should be assessed or reviewed; (iv) information should be available to the public on a timely basis; (v) periodic reports should be filed with the relevant regulator; (vi) the information should be stored to facilitate public access; (vii) disclosure criteria; (viii) equal access to disclosure; and (ix) equivalence of disclosure.

AMF reports on 2009 enforcement activity

Stikeman Elliott LLP — Tue, 23 Feb 2010 14:35:21 -0500

On February 12, Quebec's Autorité des marchés financiers (AMF) reported on its enforcement activities for 2009. In its release, the AMF highlighted its collaborative efforts with police forces and other partners in fraud prevention and response and provided enforcement figures for the preceding year. Specifically, the AMF cited a total of 855 charges laid for violations under Quebec's Securities Act and An Act respecting the distribution of financial products and services, which led to the sanctioning of 783 individuals. Further, over $81 million in fines and penalties were assessed which, according to the AMF, represented over half of such penalties imposed in Canada.

As we noted in an earlier post, the CSA also released its 2009 enforcement report earlier this month.

ASC publishes rule consolidating local prospectus exemptions

Stikeman Elliott LLP — Mon, 22 Feb 2010 11:30:20 -0500

Effective September 28, 2009, all provinces and territories adopted National Instrument 45-106 Prospectus Requirements and Exemptions containing nationally harmonized prospectus exemptions. In addition to NI 45-106, some jurisdictions may continue to provide local prospectus exemptions through their local legislation, rules or otherwise. On February 12, the Alberta Securities Commission (ASC) published a notice requesting comments on a proposed local rule that would consolidate the remaining local prospectus exemptions available in Alberta along with related requirements contained in the Alberta Securities Commission Rules. Comments are being accepted until March 12, 2010.

CSA publish implementation milestones for order protection rule

Stikeman Elliott LLP — Fri, 19 Feb 2010 14:21:23 -0500

The Canadian Securities Administrators (CSA) published implementation milestones today for the order protection rule contained in recent amendments to National Instrument 23-101 Trading Rules. The order protection rule, which comes into effect on February 1, 2011, requires marketplaces to establish and ensure compliance with policies and procedures designed to prevent trade-throughs on that marketplace. The CSA notice, meanwhile, aims to facilitate implementation of the order protection rule by establishing various technical milestones for marketplaces to meet. According to the notice, marketplaces will be expected to provide the CSA with information regarding their progress on each milestone date. The CSA are also encouraging marketplaces to consider whether to publicly disclose progress-related information. A notice providing details about an industry-wide test is expected to be published by the CSA in the coming months.

RiskMetrics announces governance-related risk assessment tool

Stikeman Elliott LLP — Fri, 19 Feb 2010 11:25:49 -0500

RiskMetrics Group recently announced the introduction of a successor tool to the Corporate Governance Quotient (CGQ), known as Governance Risk Indicators (GRId). GRId is intended "to help investors better assess the level of governance-related risk at portfolio companies."

The GRId methodology is based on 60 to 80 questions for each market pertaining to four governance categories: (i) board; (ii) audit; (iii) compensation/remuneration; and (iv) shareholder rights. The evaluations of risk will be derived from "the specific company answers, weighted according to each question's significance in the company's market and prevailing best practices in that market." The results will be used to create summary assessments, identifying the level of concern across the four categories of corporate governance described above.

Governance Risk Indicators will be published on proxy research reports beginning in March, with CGQ to be retired at the end of June 2010.