The Canadian Securities Administrators is amending the national rule dealing with how issuers may communicate with shareholders, NI 54-101 Communication with Beneficial Owners of Securities of a reporting issurer.

The existing instrument and policy came into effect on July 1, 2002. Its primary purpose is to ensure that beneficial owners of securities of a reporting issuer can receive proxy-related materials and provide instructions on how the securities they beneficially own are to be voted. To do this, it sets out detailed procedures by which proxy-related materials are provided to the beneficial owner, and the beneficial owner provides voting instructions. The rule also imposes obligations on the reporting issuer, the depository and intermediaries who hold on behalf of the beneficial owner.

The CSA reports that it has been monitoring the rule and policy since they came into effect. The proposed amendments are intended to make the rule clearer and also improve the regulatory regime. Details of the proposed amendments were contained in a notice and request for comments published in October 2003.

The CSA received six comments to its proposals, and has made some changes and a result. It says that these changes are not material, and so it is not republishing the amendments for a further comment period.

The changes include: amending the note to the client response form regarding investment funds’ annual reports or financial statements; further explanation of how the rule meshes wit continuous disclosure obligations; and, it has added a transition provision.

Provided all necessary ministerial approvals are obtained, the amendments will come into force on February 9, 2005.