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gaps its report identified, and is also "in the process of establishing an industry advisory committee to discuss current underwriting standards and best prac- tices, beginning with a dialogue on under- writer due diligence generally, as well as the unique challenges of underwriting securities for emerging market issuers." For stock exchanges, the OSC review suggested a rethink of policies and pro- cedures geared towards emerging market issuers may be due, noting the lack of any requirements that issuers maintain a meaningful Canadian presence. The OSC was also concerned by exchanges' reliance on third parties in the due dili- gence process and the lack of transpar- ency when it waived previously published listing requirements for particular issuers. Kevan Cowan, the president of TSX markets and group head of equities for TMX, says the TSX is currently in the middle of developing its own guidance for emerging market issuers, and con- sultations are ongoing with stakeholders involved in the listing process. ferent rules on foreign issuers. As the world becomes more and more global- ized, things change, and we can refine the rules and guidance, "In the past, we have imposed dif- this year, he says they will boost investor confidence. Wilkin says Canada is still an attrac- When the results are published later " Cowan says. tive market for foreign issuers. "It may take a bit more time for some issuers to complete the listing process, and a bit more pre-planning with their advisers to get properly dressed up, but I don't see it being a significant barrier, away from a real discussion on curtailing emerging market interest in Canadian capital. A greater focus on regulatory action against issuers and gatekeepers would have forced that issue, he says. "As a price of admission to our market, According to Waitzer, the OSC shied " he says. are there prophylactic measures we want to have in place so that if something goes wrong we know that we can get in and do something about it," he says. "Do we want to scare off these listings? That's a " legitimate debate to have, but I don't see it laid out here. regulatory environment in Canada a sell- ing point for potential issuers in emerging markets, but the quality of the companies attracted is not always high. In China, for example, he says the top-tier issuers list in Shanghai or Hong Kong, leaving the rest of the world to chase the leftovers. He sees the review as an important first step, but warns investor confidence is still at risk unless the OSC makes more progress. "Once the money leaves the country, Pascutto says the TSX has made the lax you have no way of investigating, of getting access to books and records, or taking any action. That's the problem. And if they can't tackle that issue, you have to give some thought as to wheth- er we should be listing these companies at all, second or third inning. It remains to be seen what kind of action they will take. We've still got a long way to go. " he says. "We're still only in the " IH Employment and Labour Lawyers Experience Counts. Referrals respected and appreciated. Shields O'Donnell MacKillop LLP 416.304.6400 65 Queen Street W, Suite 1800, Toronto, Ontario Canada M5H 2M5 30 • AUGUST/SEPTEMBER 2012 WWW.CANADIANLAWYERMAG.COM/INHOUSE Shields_IH_Apr_11.indd 1 INHOUSE 3/1/11 10:04:56 AM

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