Proposed National Policy: NP - 34-201 - Breach of Requirements of Other Jurisdictions

Substance and Purpose of Proposed National Policy

The substance and purpose of the proposed National Policy is to give notice to registrants and applicants for registration or renewal or reinstatement ofregistration in a jurisdiction that a breach by the applicant or registrant of securities legislation, including regulations and rules, directions or policies, orself-regulatory organization regulatory instruments, of another jurisdiction or a foreign jurisdiction, may be considered to affect the fitness for registration orcontinued registration of an applicant or registrant. The proposed National Policy will facilitate consistent and co-operative treatment of conduct of registrantsand applicants.

The proposed National Policy is an initiative of the Canadian Securities Administrators (the "CSA"), and is to be adopted as a policy in each of the jurisdictionsrepresented in the CSA. The proposed National Policy is substantially similar to National Policy Statement No. 17, which it replaces, but expands the scope ofthe instruments the breach of which may be considered by the CSA. National Policy Statement No. 17 was initially published in June 1978.

Summary of Proposed National Policy

The proposed National Policy applies to registrants or applicants for registration or renewal or reinstatement of registration. A breach by an applicant orregistrant of the securities legislation (including regulations and rules), directions or policies, or the regulatory instruments of stock exchanges or otherself-regulatory organizations, of any jurisdiction, whether Canadian or international, that were adopted for the protection of investors or to foster fair andefficient capital markets and confidence in capital markets, may be considered to be prejudicial to the public interest and to affect the fitness for registration orcontinued registration of the applicant or registrant.

Terms used in the proposed National Policy that are defined or interpreted in a definition instrument in force in the jurisdiction should be read in accordance withthat definition instrument, unless the context otherwise requires.

Related Instruments

The proposed National Policy is related to provisions of Canadian securities legislation that empower Canadian securities regulatory authorities to take action torefuse to grant registration or renewal or reinstatement of registration or to suspend or revoke registration. In Ontario, each of the Director and the OntarioSecurities Commission is empowered to take such action under sections 26 and 127 of the Securities Act (Ontario) respectively.

In Ontario, the proposed National Policy is related to OSC Policy Statement Nos. 4.2 and 4.6, which are being reformulated.

Unpublished Materials

In proposing the National Policy, the CSA has not relied on any significant unpublished study, report or other written materials.

Comments

Interested parties are invited to make written submissions with respect to the proposed National Policy. Submissions received by April 15, 1998 will beconsidered.

Submissions should be made to all Canadian securities regulatory authorities and delivered in duplicate to:

Submissions should also be addressed to the Commission des valeurs mobilières du Québec as follows:

A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certainprovinces requires that a summary of written comments received during the comment period be published, confidentiality of submissions received cannot bemaintained.

Questions may be referred to:

Proposed National Policy

The text of the proposed National Policy follows, together with the footnote that is not part of the National Policy but has been included to provide backgroundand explanation.

Text of Proposed Rescission of National Policy Statement No. 17

National Policy No. 17 is replaced by the proposed National Policy and will be rescinded. The text of the proposed rescission of National Policy Statement No.17 is:

"National Policy Statement No. 17 entitled "Violations of Securities Laws of Other Jurisdictions -- Conduct Affecting Fitness for Continued Registration" isrescinded."

DATED: February 13, 1998.