The Ontario Securities Commission has released two letters it sent last week, one to Toronto Stock Exechange president and CEO, Barb Sytmiest, and one to the 10 largest securities dealers registered with the OSC. The letters seek their views on recent changes to U.S. securities legislation and regulation.

The letter to Stymiest notes that the TSX has proposed amendments to its corporate governance guidelines, which the OSC is prepared to approve subject to undisclosed amendments. It notes that those amendments were developed prior to the failures of Enron Corp., WorldCom Inc., Global Crossing Ltd. and Adelphia Communications Corporation, and the subsequent response of American stock exchanges, regulators and legislators to these events.

“It is essential that we undertake in Canada a second phase of corporate governance reform focusing primarily, but not exclusively, on reforms that have been proposed and/or implemented in the U.S. and elsewhere,” says the letter signed by OSC David Brown.

The OSC asks for the analysis and views of the TSX as to whether it would be appropriate to:

  • adopt measures in Canada similar to the provisions of the Sarbanes-OxleyAct of 2002, recommended changes in NYSE listing standards, and pending SEC proposals;
  • impose the above-noted measures as mandatory requirements in Canada; and
  • reformulate as mandatory requirements some or all of the TSX corporate governance guidelines and the additional guidelines recommended by the Saucier Committee.

Included in these changes are items such as CEO certification of financial results, board and committee composition rules and mandatory corporate odes of conduct.

The letter to the dealers seeks information on how analysts’ conflicts are managed at the firms. The letter notes that the Investment Dealers Association recently approved new rules dealing with such conflicts. But it says that the OSC is seeking more information on changes the dealers have already made, ahead of the approval of the new IDA rules.

The letters are available on the OSC’s Web site.