Canadian Lawyer InHouse

rities group at Blake Cassels & Graydon LLP who has advised emerging market companies considering access to Canadian capital, says behind the scenes, OSC staff are asking noticeably more pointed ques- tions of issuers in the wake of the report, and that players in the system have heeded the wake-up call from the regulator. "On prospectus reviews, you're seeing questions that prior to Sino-Forest maybe But John Wilkin, a partner in the secu- they weren't necessarily focused on," he says. "They're asking about what mea- sures the underwriters took in conducting due diligence, they want to know about title opinions, so they're really testing the process. I think the impact has been bet- ter documentation and communication of those practices to the regulators." For issuers themselves, the OSC expressed concern that boards of directors lacked knowledge of the cultural and busi- CANADIAN EMPLOYMENT LAW STACEY REGINALD BALL MORE THAN ,0 CASES CITED Canadian Employment Law is a one-stop reference that provides a thorough survey of the law and analysis of developing trends, suggesting potential avenues of attack as well as identifying potential weaknesses in the law. Canadian Employment Law has been cited by the Supreme Court of Canada, in superior courts in every province in Canada and is used in law schools throughout Canada. ness practices in the jurisdiction where the business was based, and the potential risks that arise as a result of those differences. That meant there was a tendency to defer to senior management on the ground, and often little contact between the two. Transparency in the corporate structure and disclosure around related party trans- actions was also found wanting, according to the review. Emerging market companies need to spend a lot more time thinking about who to place on their boards, says Wilkin, with language capability a key factor. "We're advising companies to make sure there is sufficient understanding of Canadian capital requirements on the board, as well as that link to the senior management team," he says. Companies have responded to the OSC's focus on internal controls by improving communication and disclosure at every level, according to Wilkin. "The OSC policy statement is really about making sure the information that is getting to the market is as good as it can be, and that can only serve to strengthen the capital markets," he says. Mindy Gilbert, a partner at Davies ORDER# 804218-62303 2 volume looseleaf supplements per year Supplements invoiced separately 0-88804-218-3 Internet version available separately Prices start at $4 AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.ca.c Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. CANADA LAW BOOK® Ward Phillips & Vineberg LLP in Toronto, says general counsel at all issuers, emerg- ing market or not, can learn lessons from the OSC comments. "They serve as use- ful reminders to all Canadian reporting issuers about good corporate practices," particularly for more complex businesses, she says. "The OSC report highlights that issuers operating in multiple jurisdictions need to be aware of the risks associated with local business practices and the regu- latory risks of operating in those jurisdic- tions. They need to make sure investors, management, and the board are all aware of those risks." For auditors, the OSC report may have made familiar reading. The pro- fession' Accountability Board, released its own assessment of members' performance one month before the OSC, based on an inves- tigation of 24 issuers with primary opera- tions in China. Both the OSC and CPAB identified s regulator, the Canadian Public language and cultural barriers as serious issues, as well as overreliance on manage- ment representations when it comes to the 28 • AUGUST/SEPTEMBER 2012 WWW.CANADIANLAWYERMAG.COM/INHOUSE arswell-26372_IH_Aug_12.indd 1 12-06-29 12:38 PM INHOUSE

• Cover