CDS Rule Amendment Notice - Technical Amendments to CDS Rules Relating to Strip Bond Monthly Reports Service

CDS CLEARING AND DEPOSITORY SERVICES INC. (CDS)

TECHNICAL AMENDMENTS TO CDS FORMS

STRIP BOND MONTHLY REPORTS SERVICE SUBSCRIPTION FORM

SERVICE USAGE STATEMENT

NOTICE OF EFFECTIVE DATE

A. DESCRIPTION OF THE RULE AMENDMENT

Background

The Strip Bond Monthly Reports Service (the "Service"), previously offered by CDS INC., was transferred to CDS on November 1, 2006, as a consequence of the recent corporate restructuring of The Canadian Depository for Securities Limited. The proposed amendments to the Subscription Form and Service Usage Statement are made in order that the forms reflect the correct service provider.

In addition, the proposed amendments to the forms reflect the recent coming-into-force of CDS's Rule amendments respecting Intellectual Property.

The Forms marked for the amendments may be accessed on the CDS website at:

http://www.cds.ca/cdsclearinghome.nsf/Pages/-EN-UserDocumentation?Open

Description of Proposed Amendments

Subscription Form

The proposed updated form is substantively similar to the Strip Bond Monthly Reports Service Subscription Form currently in use. The proposed form, however, is substantially more transparent with respect to the terms and conditions of Participants' use of the Service. Upon receipt of regulatory approval/non-disapproval, use of the current form will be discontinued.

First, the proposed amendments to the Subscription Form clarify that a CDS Participant wishing to receive the Service is subscribing to a service that is in addition to the core services that the Participant receives from CDS and provides a more detailed service description.

Second, the proposed amendments to the Subscription Form clarify that, in accordance with the intellectual property provisions of the CDS Participant Rules, additional users of the information must be from within the Participant's organization.

Third, the proposed amendments specify that the fees for use of the Service will be published in CDS's price lists and will be collected in accordance with CDS Participant Rules.

Fourth, in Section 4 of the Subscription Form, entitled Authorized Use, the proposed amendments detail the limitations on the use of the information received as part of the Service for the benefit of third parties, and note that any such use is governed by the intellectual property provisions of the CDS Participant Rules.

Finally, the proposed amendments clarify that CDS shall be entitled to rely on the Schedule of Authorized Users until such time as CDS receives an updated Schedule of such users from the Participant.

Service Usage Statement

In order more efficiently to manage its intellectual property within the scope of the CDS Participant Rules, the Service Usage Statement Form for the Service has been created. In order to assure compliance with the intellectual property provisions of the CDS Participant Rules, Participants subscribing to the Service will be required to detail their proposed use of the information provided as part of the Service.

The proposed form has been drafted to support compliance with CDS's Intellectual Property Rule and, as such, has no predecessor form.

B. REASONS FOR TECHNICAL CLASSIFICATION

The amendments proposed pursuant to this Notice are considered technical amendments as they:

a) are consequential amendments intended to implement a material rule (the Intellectual Property Rules) that have already been published for comment; and

b) are required to ensure consistency and compliance with an existing Rule (Corporate Restructuring).

C. EFFECTIVE DATE OF THE RULE

Pursuant to Appendix A ("Rule Protocol Regarding The Review And Approval Of CDS Rules By The OSC") of the OSC Recognition and Designation Order, as amended November 1, 2006, and Annexe A ("Protocole d'examen et d'approbation des Règles de Services de Dépôt et de Compensation CDS Inc. par l'Autorité des marchés financiers") of AMF Decision 2006-PDG-0180, made effective on November 1, 2006, CDS has determined that these amendments will be effective on January 1, 2007.

D. QUESTIONS

Questions regarding this notice may be directed to:

Tony Hoffmann

Legal Counsel

CDS Clearing and Depository Services Inc.

85 Richmond Street West

Toronto, Ontario M5H 2C9

Telephone: 416-365-3768

Fax: 416-365-1984

e-mail: [email protected]