Canada’s securities regulators are amending the national policy dealing with income trusts.

National Policy 41-201 Income Trusts and Other Indirect Offerings first came into effect in December 2004.

In January 2007, the Canadian Securities Administrators published a proposed amended policy for a 60-day comment period. The amended policy has been, or is expected to be, adopted in all jurisdictions and will replace the December 2004 version of the policy, effective today.

Regulators have reorganized the policy to more clearly group its guidance in the areas of distributable cash, prospectus offerings and continuous disclosure. Among other things, they have added guidance on distributable cash and distributable cash disclosure; clarified the content of the undertakings expected for insider reporting and financial information of subsidiaries; clarified expectations of MD&A disclosure of distributed cash; and clarified guidance on the disclosure of differences between corporate law protections and those provided by an issuer’s declaration of trust.

The CSA says it received submissions from 12 commenters. It made a few changes as a result of the comments, but they are not regarded as material changes.

The CSA also reviewed the comments received by the Canadian Performance Reporting Board of the Canadian Institute of Chartered Accountants on a draft interpretive release regarding the measurement and disclosure of distributable cash in MD&A by income trusts and other flow-through entities.

“The distributable cash guidance in this policy is intended to promote transparent disclosure for investors with respect to presentations of distributable cash. We understand that the CPRB is considering changes to its draft guidance in response to comments received and it plans to provide guidance not only on disclosure but also on a standardized measure of distributable cash derived directly from historical financial statements prepared in accordance with GAAP,” the CSA says.

“We will evaluate the form and impact of the final CPRB guidance when it is published. However, based on our current understanding of the likely content of the CPRB guidance, we believe that presentation of the standardized measure of distributable cash defined in the guidance is consistent with the objectives of the policy,” it adds. “Further, additional disclosure in MD&A consistent with the framework provided in the CPRB guidance would contribute to achieving the disclosure objectives of the policy.”