A top official with the Ontario Securities Commission said Tuesday that Maple Acquisition Corp.’s proposed bid to overhaul the trading landscape in Canada will face “extensive” regulatory conditions.

Last week, it was revealed that the Autorité des marchés financiers intends to approve Maple’s bid to acquire the TMX Group, Alpha Trading and CDS Ltd., and that the OSC is also working on a recognition order that would impose terms and conditions on the resulting organization.

In a speech Tuesday to the Institute of Corporate Directors, Maureen Jensen, executive director of the OSC, said that those terms and conditions “will be substantive and extensive”.

“They will deal with issues that all market participants have raised with us, including governance, conflicts of interest, fair access and fees,” she noted. The details of the conditions to be imposed by the OSC and the AMF, as well as other regulators, have yet to be revealed, but Jensen noted today that, “There are a number of issues that need to be satisfactorily addressed through enhanced regulation and the imposition of terms and conditions.”

When the OSC’s draft recognition order is final, it will be published for a further 30-day public comment period, before the commission makes a final decision on the deal (which also requires several other regulatory approvals).

Apart from the Maple proposal, Jensen also touched on the OSC’s new strategic plan, its review of emerging market issuers that was published today, and shareholder democracy issues, in her speech.
She noted that the commission is planning to publish its next draft statement of priorities for comment in April, setting out “which strategic plan initiatives will be addressed in the 2012-2013 fiscal year, as well as other important priorities and activities.”

In terms of shareholder issues, she noted that the OSC is working with the TSX to address concerns about the director election process, and said that they “encourage all reporting issuers to adopt a majority voting policy”.

She also said that it plans to research concerns about the proxy voting system. “We will empirically investigate these concerns about the transparency, efficiency and accountability of our voting system and design an appropriate regulatory response,” she noted. And, she said that the Canadian Securities Administrators will soon soliciting feedback about the role of proxy advisors in influencing shareholder voting.

Finally, she noted that the regulators are also reviewing their approach to shareholder rights plans. “The OSC is working with the CSA on creating a transparent framework for rights plans that allows target boards more latitude in responding to hostile bids if shareholder approval of the rights plan has been obtained,” she said. “We believe that it’s important that the decision on how to respond to a hostile bid be left to an issuer’s board and its shareholders, rather than be made by regulators in hearings on an ad hoc basis.”