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BULLETIN #0807-P
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Paige Ward

General Counsel, Corporate Secretary and Vice President, Policy

(416) 943-5838

pward@mfda.ca

BULLETIN #0807-P

January 30, 2020

Policy

For Distribution to Relevant Parties within your Firm

Approval of Proposed Amendments to MFDA By-Law No. 1 Sections 3.3 (Election and Term), 3.6.1 (Governance Committee), 4.7 (Quorum)

The securities regulatory authorities in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan have approved/not objected to proposed amendments to MFDA By-law No.1, Sections 3.3 (Election and Term), 3.6.1 (Governance Committee) and 4.7 (Quorum). The proposed amendments have received all the requisite approvals and are now in effect.

The proposed amendments are intended to ensure that the governance structure of the MFDA aligns with comparator organizations, where appropriate, and continues to reflect best governance practices for SROs.

To view the Notice of Approval/Non-Objection, please go to www.bcsc.bc.ca.


Proposed Amendments to MFDA By-law No .1 (Sections 3.3, 3.6.1 and 4.7)

3.3. Election and Term

3.3.2. Public Directors

At each Annual Meeting, 3a number of Public Directors shall be elected to fill the vacancies created by the expiry of the terms of office of 3that number of Public Directors whose terms have expired at such meeting. The term for each Public Director to be elected at an Annual Meeting shall expire at the third Annual Meeting next following such election (in the case of a Public Director’s first or second successive term) or the second Annual Meeting next following such election on(in the case of the Public Director’s third successive term), upon the election of his or her successors, unless expired earlier in accordance with this By-law. The Board of Directors shall be authorized to fix the term of any Public Director to be elected for a period of less than 3 years in order to maintain the intended staggered terms of all Public Directors, but no such term shall be shortened if the Public Director has commenced his or her term of office. A Public Director shall be eligible to serve for only 23 successive terms and such terms shall be of a period of 3 years for the first and second terms and of a period of 2 years for the third term, or such shorter period as may be of 2 3 years which shall include any shorter term as may have been fixed by the Board of Directors in accordance with this By-law, but shall exclude any portion ofprovided that (i) if the Board of Directors fixes a term of fewer than 3 years in respect of the first or second terms or fewer than 2 years for the third term, the maximum number of successive terms shall not exceed 3; and (ii) a term of office in respect of a vacancy filled pursuant to Section 3.5 shall not be included in determining whether a Public Director has served a maximum of 3 successive terms. Unless nominated otherwise in accordance with the Act, each Public Director to be elected at an Annual Meeting shall have been recommended by the Governance Committee to the Board of Directors for nomination for election by the Members according to the requirements of the By-laws and the terms of reference of the Governance Committee adopted by the Board of Directors. Any Member shall be entitled to submit to the Governance Committee nominations for Public Directors provided that such nominations shall have been received by the Corporation not less than 60 days prior to the relevant Annual Meeting.

3.3.3. Industry Directors

At each Annual Meeting, 3a number of Industry Directors shall be elected to fill the vacancies created by the expiry of the terms of office of 3that number of Industry Directors whose terms have expired at such meeting. The term for each Industry Director to be elected at an Annual Meeting shall expire at the second Annual Meeting next following such election onupon the election of his or her successors, unless expired earlier in accordance with this By-law. The Board of Directors shall be authorized to fix the term of any Industry Director to be elected for a period of less than 2 years in order to maintain the intended staggered terms of all Industry Directors, but no such term shall be shortened if the Industry Director has commenced his or her term of office. An Industry Director shall be eligible to serve only 43 successive terms of 2 years which shall include anyor such shorter termperiod as may have been be fixed by the Board of Directors in accordance with this By-law, but shall exclude any portion of provided that (i) if the Board of Directors fixes a term of fewer than 2 years in respect of any term, the maximum number of successive terms shall not exceed 4; and (ii) a term of office in respect of a vacancy filled pursuant to Section 3.5 shall not be included in determining whether an Industry Director has served a maximum of 4 successive terms. Unless nominated otherwise in accordance with the Act, each Industry Director to be elected at an Annual Meeting shall have been recommended by the Governance Committee to the Board of Directors for nomination for election by the Members according to the requirements of the By-laws and the terms of reference of the Governance Committee adopted by the Board of Directors. Any Member shall be entitled to submit to the Governance Committee nominations for Industry Directors provided that such nominations shall have been received by the Corporation not less than 60 days prior to the relevant Annual Meeting.

3.3.4. Transition

At the Annual Meeting when this section 3.3.4 is sanctioned and becomes effective,

  1. Public Directors whose terms do not expire at such time (having served fewer than 2 successive terms) shall remain eligible to be nominated and elected as Public Directors at subsequent Annual Meetings for a further consecutive third successive term provided that no such Public Director shall be eligible to serve in aggregate for more than 8 consecutive years as a Public Director;
  2. Industry Directors whose terms do not expire at such time (having served fewer than 3 successive terms) shall remain eligible to be nominated and elected as Industry Directors at subsequentAnnual Meetings for a further fourth successive term provided that no such Industry Director shall be eligible to serve in aggregate for more than 8 consecutive years as an Industry Director.

3.6 Committees

3.6.1  Governance Committee

The Board of Directors shall establish a Governance Committee composed of 23 Public Directors and 2 Industry Directors. The 2 Industry Director members of the Governance Committee shall be officers or employees of a Member of the Corporation or of an affiliate or corporation which is an associate of a Member. The Chair of the Governance Committee shall be 1 of the 23 Public Directors as selected by the Board of Directors. The Governance Committee shall be responsible for identifying and recommending to the Board of Directors Public and Industry Directors for election to the Board of Directors in accordance with the By-laws and the terms of reference adopted for the Governance Committee by the Board of Directors. In addition, the Governance Committee shall perform such other duties as the Board of Directors may delegate or direct from time to time. 12 Public Directors and 1 Industry Director shall constitute a quorum of the Governance Committee.

3.6.2 Audit Committee

The Board of Directors shall establish an Audit Committee composed of 3 Public Directors and 2 Industry Directors. The Chair of the Audit Committee shall be 1 of the 3 Public Directors as selected by the Board of Directors. The Audit Committee shall review and report to the Board of Directors on the annual financial statements of the Corporation and shall perform such other duties as the Board of Directors may delegate or direct from time to time. 2 Public Directors and 1 Industry Director shall constitute a quorum of the Audit Committee.

3.6.3 Executive Committee

The Board of Directors may in its discretion establish an executive committee (which may be otherwise named) composed of an equal number of Public Directors and Industry Directors. The Chair of the Executive Committee, if any, may be either a Public Director or Industry Director and shall be selected by the Board of Directors. The Executive Committee shall exercise such powers and such duties as are delegated or directed by the Board of Directors including, without limitation, the authority to exercise any of the powers of the Board of Directors. 1 Public Director and 1 Industry Director shall constitute a quorum of the Executive Committee.

3.6.4  Other Board Committees

The Board of Directors may from time to time in its discretion appoint any other committee or committees as it considers necessary or appropriate for such purposes and with such powers as the Board of Directors may determine including, without limitation, the authority to exercise any of the powers of the Board of Directors and to act in all matters for and in the name of the Board of Directors under the By-laws. Subject to any provisions of the By-laws otherwise, any such committee may be composed of Public Directors or Industry Directors, or both. A majority of the members of a committee established under this Section 3.6.4 shall constitute a quorum, provided that if the committee is composed of 1 or more Public Directors, a quorum shall include 1 Public Director.

3.6.5 Committee Membership and Procedures

Members of any committee of the Board of Directors including, without limitation, the Governance Committee, Audit Committee, Executive Committee (if any) or any other committee established pursuant to Section 3.6.4 and shall be appointed and subject to removal by the Board. The Board of Directors may prescribe rules and procedures not inconsistent with the Act and the By-laws relating to the calling of meetings of, and conduct of business by, committees of the Board. Subject to the By-laws and any resolution of the Board of Directors, meetings of any such committee shall be held at any time and place to be determined by the Chair of the committee or its members provided that 48 hours’ prior written notice of such meetings shall be given, other than by mail, to each member of the committee. Notice by mail shall be sent at least 14 days prior to the meeting. No error or accidental omission in giving notice of any meeting of a committee shall invalidate such meeting or make void any proceedings taken at such meeting.

4. Meetings of Directors

4.1 Place of Meeting

Meetings of the Board of Directors may be held at any place within Canada.

4.2 Notice

A meeting of directors may be convened by the Chair of the Board, the Vice-Chair of the Board, the President and Chief Executive Officer or any 2 directors at any time. The Secretary, when directed or authorized by any of such officers or any 2 directors, shall convene a meeting of directors. Unless sent by mail, 7 days’ notice of such meeting shall be given to each director. Notice of any such meeting that is sent by mail shall be served in the manner specified in Section 31 not less than 14 days (exclusive of the day on which the notice is given) before the meeting is to take place; provided always that a director may in any manner and at any time waive notice of a meeting of directors and attendance of a director at a meeting of directors shall constitute a waiver of notice of the meeting except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called; provided further that meetings of directors may be held at any time without notice if all the directors are present (except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called) or if all of the absent directors waive notice before or after the date of such meeting.

4.3 Error or Omission in Giving Notice

No error or accidental omission in giving notice of any meeting of directors shall invalidate such meeting or make void any proceedings taken at such meeting.

4.4 Chair and Secretary

The Chair of the Board or, in his or her absence, the Vice-Chair, shall be chair of any meeting of the directors. If no such officer is present, the directors present shall choose 1 of their number to be chair. If the Secretary is absent, the chair of the meeting shall appoint some person, who need not be a director, to act as secretary of the meeting.

4.5 Adjournment

Any meeting of directors may be adjourned from time to time by the Chair of the meeting, with the consent of the meeting, to a fixed time and place. Notice of any adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The directors who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.

4.6 Regular Meetings

The Board of Directors may appoint a day or days in any month or months for regular meetings of the Board of Directors at a place or hour to be named by the Board of Directors and a copy of any resolution of the Board of Directors fixing the place and time of regular meetings of the Board of Directors shall be sent to each director forthwith after being passed, but no other notice shall be required for any such regular meetings.

4.7 Quorum

A majority of the directors then in office, including a majority of Public Directors, shall form a quorum for the transaction of business provided that 2 Public Directors are present and, notwithstanding any vacancy among the directors, a quorum may exercise all the powers of directors.

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