Canadian securities regulators publish guidance on conflict of interest transactions

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Jul 27, 2017

On July 27, 2017, the securities regulatory authorities in Ontario, Québec, Alberta, Manitoba and New Brunswick (the participating jurisdictions) 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 outlines the approach used to review material conflict of interest transactions, including insider bids, issuer bids, business combinations and related party transactions that give rise to concerns regarding the protection of minority security holders.

The notice describes how staff review conflict of interest transactions to assess compliance with Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions (MI 61-101), including the timing and scope of such reviews, the information-gathering process and potential remedies in the event of non-compliance.

The notice also contains a discussion of staff’s views on special committees of independent directors and enhanced disclosure requirements based on the requirements of MI 61-101 and associated guidance, decisions of securities regulatory authorities, and issues identified in reviews of material conflict of interest transactions. The discussion addresses the role, composition and mandate of special committees, and disclosure regarding the background, approval process and fairness opinions for conflict of interest transactions

For fur­ther de­tails, re­view the No­tice on the CSA's web­site, and the Staff Notice and MI 61-101 on the participating jurisdictions web­sites.

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