Ontario regulators approved new corporate governance measures proposed by the TSX group today, and published a series governance-related rules for comment.

The Ontario Securities Commission reported that it approved amendments to the TSX Company Manual relating to corporate governance. The amendments provide that listed issuers will be required to disclose their corporate governance practices, and that the TSX will monitor corporate governance disclosure. The amendments were initially published for comment on October 29, 2004, but no comments were received.

At the same time, the OSC published a national rule regarding governance practices disclosure; corporate governance guidelines; and amendments to rules regarding audit committees. The disclosure rule and the audit committee amendments were delivered to the Chair of the Management Board of Cabinet today for approval. If the minister approves the Disclosure Rule and Audit Committee Amendments or does not take any further action by June 14, 2005, they will come into force on June 30, 2005.

Regulators note that the purpose of the audit committee rule is to encourage reporting issuers to establish and maintain strong, effective and independent audit committees. “We believe that such audit committees enhance the quality of financial disclosure made by reporting issuers, and ultimately foster investor confidence in Canada’s capital markets,” they say. The amendments clarify the definition of independence.

The governance guidelines set out the regulators recommended practices, but are not intended to prescriptive. It deals with issues such as board independence, the composition of board committees, and proficiency.