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Amendments to the TSX Company Manual and Amendments to the TSX Rule Book

Ara Basmadjian, articling student, assisted in the preparation of this article.

On October 11, 2012, the Toronto Stock Exchange (“TSX”) issued a request for comments on proposed amendments (the “Amendments”) to the TSX Company Manual (the “Company Manual”) and the TSX Rule Book (the “TSX Rules”). The Amendments provide clarification to the process of appeal with respect to listing-related decisions. Furthermore, the Amendments offer consistency between the appeal rules under the Company Manual and those under the TSX Rules.

The Amendments, which will become effective upon approval by the Ontario Securities Commission (“OSC”), include the following:

(1) changes to the composition of the appeal panel. An appeal will be heard by at least one and up to three senior TSX executives;

(2) codification of the common practice of submitting written requests for appeals and written submissions;

(3) clarification of the decision making responsibilities that are delegated to listing managers;

(4) clarification of the timeline to appeal delisting decisions; and

(5) revision and clarification of the rules relating to the suspension and termination of participating organizations.

The TSX will publish the Amendments for a 30-day comment period. Written comments are accepted until November 12, 2012.

Amendments to the TSX Company Manual and Amendments to the TSX Rule Book

New Rules Requiring Companies Listed on U.S. Exchanges, to Disclose Payments Over $100,000 Made to Governments

Shaira Nanji, articling student, assisted in the preparation of this article.

On August 22, 2012, the United States Securities and Exchange Commission passed a new rule regarding section 1504 of the Dodd-Frank Wall Street Financial Reform Act (the “Act”) which focuses on transparency of natural resource payments. Canadian mining companies that are listed or traded on U.S. exchanges should be aware of the new regulation. The purpose of the regulation is to enhance corporate and government accountability.

Section 1504 of the Act states that publicly traded issuers must annually disclose and report any payment or series of payments over $100,000 to governments related to the commercial development of oil, natural gas or minerals. Issuers must file a new form called Form SD, Specialized Disclosure, starting after September 30, 2013. The new regulation clarifies the types of taxes, fees, bonuses, and dividends that are required to be disclosed. The types of payments related to commercial development activities that need to be disclosed include:

• taxes;
• royalties;
• fees (including license fees);
• production entitlements;
• bonuses;
• dividends; and
• infrastructure improvements.

New Rules Requiring Companies Listed on U.S. Exchanges, to Disclose Payments Over $100,000 Made to Governments

OSC Focuses on Improvements to the Director Election Process in its 2012 Annual Report

Shaira Nanji, articling student, assisted in the preparation of this article.

The Ontario Securities Commission (OSC) recently released its 2012 annual report (“Report”) which provides an update on the OSC’s intentions concerning potential reforms to the regulation of director elections. The Report discusses how to strengthen “shareholder democracy” and shareholder voting rights with regards to the uncontested director-elections process. The Report supports an earlier proposal made by the Toronto Stock Exchange (TSX) in September 2011 which suggested that:

• directors of listed issuers are elected individually and not by slate voting;

• listed issuers disclose the voting results from shareholders meetings (even if the vote was done by raising hands); and

• listed issuers disclose if they have a majority-voting policy when electing directors.

The TSX proposal also focuses on majority voting for director elections and includes a “comply or explain” disclosure-based regime. Since shareholder voting rights have a “significant impact on confidence in the capital markets,” the Report notes that these proposed initiatives will result in greater transparency and accountability of boards of directors. The OSC plans to work closely with the TSX to improve the director-elections process.

OSC Focuses on Improvements to the Director Election Process in its 2012 Annual Report