Following some controversy arising from the use of
"soliciting dealer arrangements" in recent proxy
contests, the Canadian Securities Administrators (the
"CSA") have released a staff notice and
request for comment (the "Staff Notice")
seeking a range of general information from market participants
about their prevalence and use, as well as the market's views
on their appropriateness. The CSA have not proposed any specific
new rules or guidance, but their interest in the subject should
raise expectations of increasing scrutiny and potential
regulation.
Soliciting dealer arrangements
("SDAs") are agreements under which an
issuer agrees to pay a fee to one or more brokers in exchange for
those brokers soliciting their clients to vote on a resolution or
tender to a takeover bid. While SDAs are commonly used in public
M&A transactions, some institutional shareholders, proxy
advisory firms and corporate governance organizations have
criticized their use, citing both
