The Alberta Securities Commission has implemented a National Instrument dealing with underwriting conflicts. NI 33-105 Underwriting Conflicts takes effect on Jan. 3, 2002.

The instrument began as an initiative of the Canadian Securities Administrators . It has been implemented as a rule in Alberta and will be adopted as a rule in B.C, Ontario, Nova Scotia and Newfoundland. In August of 2001, the Québec Commission decided to adopt it in Québec.

The rule seeks to protect the integrity of the underwriting process by imposing regulatory requirements on distributions of securities where the relationship between the issuer or selling security holder and the registrant acting as underwriter gives rise to an actual or perceived conflict between the interests of the underwriter or the issuer and those of investors.

It imposes certain disclosure requirements on those transactions and, in some cases, requires that an independent registrant participate.

The rule was first published for comment in February 1998. It was revised substantially and published for comment again in June 2001.

There have been no material changes since then, although there has been an amendment which states that registrants are encouraged to adopt written internal control measures to ensure that, in connection with the distribution of securities of a “related issuer” or a “connected issuer”, they deal with the issuer as an independent party, as if acting at arm’s length. The amendment is not intended to represent a new requirement or obligation for registrants.