July 21, 2006 CSA Securities

Toronto – The Canadian Securities Administrators (CSA) are seeking comments on proposed National Instrument 23-102 - Use of Client Brokerage Commissions as Payment for Order Execution Services or Research (“Soft Dollar” Arrangements) and Companion Policy 23-102. The proposed instrument and companion policy clarify how advisers and registered dealers can use client brokerage commissions and include guidelines regarding disclosure of “soft dollar” arrangements.

Soft dollar arrangements refer to the advisers’ use of brokerage commission dollars to pay for trading-related goods or services, including research, advice and analytical tools in addition to trade execution costs. Such arrangements may result in conflicts of interest and obscure the adviser’s best execution.

“The goal here is to ensure that advisers manage the appearance of conflicts of interest that may develop when investors do not have complete information about how the adviser spends their money,” says Jean St-Gelais, Chair of the CSA and President & Chief Executive Officer of the Autorité des marchés financiers (Québec). “Investors may not be aware of soft dollar practices. Enhancing disclosure requirements in this area will improve investors’ confidence.”

The CSA Proposed National Instrument 23-102 - Use of Client Brokerage Commissions as Payment for Order Execution Services or Research (“Soft Dollar” Arrangements), - and Companion Policy 23-102 are available on several CSA members’ websites. The comment period ends on October 19th, 2006.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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