New Corporate Governance Rules Come Into Effect In Canada

by Glen Shapiro, LawAndTax-News.com, New York

05 April 2004

The Ontario Securities Commission last Tuesday unveiled tough new corporate governance rules in response to the United States' Sarbanes-Oxley Act.

Under the new regulations, CEOs and CFOs of publicly traded companies will be obliged to certify that they stand behind the financial statements issued by their firms, and widely held companies will be required to put in place audit committees composed of independent directors.

Speaking to the Globe and Mail last week, OSC chairman, David Brown observed that although the Canadian markets are showing some signs of a resurgance in investor confidence, many of the country's investors are still observing from the sidelines.

"I don't think we can drop our guard," he told the Canadian newspaper, continuing: "We can't relax at all, because I think that confidence could be lost if investors were to get the idea that we were slacking off."

Mr Brown went on to suggest that he is optimistic about the prospect of the creation of a single Canadian regulator in the future, observing that:

"I think we've gone beyond the point where it's a question of whether. I think we're into an issue of how and when, and if it's in stages, what are the stages."

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