Notice of Commission Approval - Material Amendments to CDS Rules Relating to Issuer Electronic Payments

Market Regulation Document Type
Canadian Depository for Securities Limited (CDS) rule review

CDS CLEARING AND DEPOSITORY SERVICES INC.

MATERIAL AMENDMENTS TO CDS RULES

ISSUER ELECTRONIC PAYMENTS

NOTICE OF COMMISSION APPROVAL

On March 6, 2009, the Commission approved, subject to the following terms and conditions, amendments to the rules of CDS Clearing and Depository Services Inc. (CDS) relating to issuer electronic payments, in accordance with the Rule Protocol Regarding the Review and Approval of CDS Clearing and Depository Services Inc. Rules by the Ontario Securities Commission. The amendments will require, as of November 1, 2011, all entitlement payments made to CDS to be made in an acceptable electronic format, as defined in the amended rules. The amendments further provide that, after November 1, 2011, securities of issuers that do not make entitlement payments to CDS in an acceptable electronic format will be ineligible for deposit with CDSX©. A notice and description of the amendments was published, together with a request for comment, in the Commission's Bulletin on December 12, 2008, at (2008) 31 OSCB 11954. No comment letters were received regarding the amendments. The terms and conditions to the Commission approval are as follows:

1. CDS report to OSC staff quarterly on (i) the specific steps or actions that CDS has taken during the quarter to raise the awareness of the proposed amendments among issuers, transfer agents and law firms, and (ii) statistics on the total number and value of non-electronic entitlement payments received by CDS relative to the combined electronic and non-electronic entitlement payments received by CDS during the quarter.

2 CDS provide OSC staff, by June 1, 2011 with an estimate of the number of issuers whose securities it believes may become ineligible for the depository service as a result of the inability or unwillingness of issuers to make entitlement payments in the required manner, with a proposal for any alternative action that may be considered.