Ontario Bill Governing Transfers of Securities

In December 2005, the Ontario government introduced a bill to modernize the laws governing the transfer of securities in Ontario. The Securities Transfer Act, 2005 is closely based on revised Article 8 of the Uniform Commercial Code, which has operated effectively in the United States for over a decade. The close harmonization of Canadian and U.S. laws in this area will facilitate cross-border secured financings between these two countries.

When this bill becomes law (which is expected in the second half of 2006), it should be easier for Ontario businesses to

• obtain loans secured by publicly traded securities held through clearing agencies such as The Canadian Depository for Securities Limited (CDS) and foreign clearing agencies such as Depository Trust Company (DTC) and Euroclear and