Notices

CSA NOTICE AND REQUEST FOR COMMENTS PROPOSED CONSEQUENTIAL AMENDMENTS TO REGISTRATION, PROSPECTUS AND CONTINUOUS DISCLOSURE RULES RELATED TO NATIONAL INSTRUMENT 25-101 DESIGNATED RATING ORGANIZATIONS 1. Introduction We, the Canadian Securities Administrators (CSA) are publishing for a 90 day comment period proposed amendments to: • Companion Policy 21-101CP Marketplace Operation (21-101CP) • National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) • Form 31-103F1 Calculation of Excess Working Capital (31-103F1) • Form 33-109F6 Firm Registration (33-109F6) • National Instrument 41-101 General Prospectus Requirements (NI 41-101) • National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) • Form 44-101F1 Short Form Prospectus (44-101F1) • Companion Policy 44-101CP Short Form Prospectus Distributions (44-101CP) • National Instrument 44-102 Shelf Distributions (NI 44-102) • Companion Policy 44-102CP Shelf Distributions (44-102CP) • National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) • National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) • National Policy 51-201 Disclosure Standards (NP 51-201) • National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) • National Instrument 81-102 Mutual Funds (NI 81-102) • Companion Policy 81-102CP Mutual Funds (81-102CP) • National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) (collectively, the DRO Consequential Amendments). The DRO Consequential Amendments are set out in the following appendices to this Notice: • Appendix A – 21-101CP • Appendix B – NI 31-103 and 31-103F1 • Appendix C – 33-109F6 • Appendix D – NI 41-101 • Appendix E – NI 44-101, 44-101F1 and 44-101CP • Appendix F – NI 44-102 and 44-102CP • Appendix G – NI 45-106 • Appendix H – NI 51-102

• Appendix I – NP 51-201 • Appendix J – NI 81-101 • Appendix K – NI 81-102 and 81-102CP • Appendix L – NI 81-106 2. Background On January 27, 2012, the CSA published a notice (the January Notice) regarding the adoption of National Instrument 25-101 Designated Rating Organizations (NI 25-101), related consequential amendments and National Policy 11-205 Process for Designation of Credit Rating Organizations in Multiple Jurisdictions, which came into effect on April 20, 2012. NI 25-101 imposes requirements on those credit rating agencies or organizations (CROs) that wish to have their credit ratings eligible for use in securities legislation by requiring them to apply to become a “designated rating organization” (DRO) and adhere to rules concerning conflicts of interest, governance, conduct, compliance and required filings (the DRO Regime). This regulatory framework is consistent with international regimes applicable to CROs. In the January Notice, the CSA indicated that, following the implementation of NI 25- 101 and the application for designation by interested CROs, the CSA would propose to make the DRO Consequential Amendments in order to implement the DRO Regime. On April 30, 2012, the CSA announced the designation of DBRS Limited, Fitch, Inc., Moody’s Canada Inc., and Standard & Poor’s Rating Services (Canada) as DROs under applicable securities legislation, as contemplated under NI 25-101 (the April Designation Orders). The four rating agencies granted DRO status are in compliance in all material respects with U.S. federal securities laws applicable to a nationally recognized statistical rating organization (NRSRO). The April Designation Orders make each of the DROs subject to regulation under applicable Canadian securities legislation and provide a six month transition period to fully implement all requirements set out in NI 25-101. Once they have done so, the CSA expect to issue and announce amended and restated designation orders under the terms of NI 25-101. 3. Substance and Purpose of the DRO Consequential Amendments Many investors and intermediaries rely on credit ratings when making investment decisions about debt securities and other structured products. Canadian securities legislation also includes a number of references to credit ratings. Some of these provisions permit different treatment based on the credit rating. For example, highly rated short-term debt securities can be distributed under an exemption from registration and prospectus requirements 1 , can be distributed by short-form prospectus 2 , are “qualified securities” 3 for mutual funds and are eligible investments for money-market funds 4 . 1 See section 2.35 of NI 45-106. 2 See sections 2.3, 2.4 and 2.6 of NI 44-101. 3 See the definition of “qualified security” in section 1.1 of NI 81-102. 4 See the definition of “money market fund” in section 1.1 of NI 81-102.

These provisions currently include references to “approved rating”, “approved credit rating”, “approved rating organization” and “approved credit rating organization”. The DRO Consequential Amendments will replace these existing references to “approved rating organization”, and “approved credit rating organization” with “designated rating organization”. Similarly, the terms “approved rating” and “approved credit rating” will be replaced with “designated rating” and amended to include a rating provided by a DRO affiliate, another defined term in NI 25-101. We are also publishing for comment a related consequential amendment to Item 7.9 of Form 44-101F1 Short Form Prospectus to clarify that the disclosure of an issuer’s relationship with a CRO is limited to the securities being distributed under a short form prospectus. 4. Local Notices and Amendments Certain jurisdictions are publishing other information required by local securities legislation in Appendix M to this notice. 5. Comments We request your comments on the DRO Consequential Amendments. Please provide your comments in writing by October 24, 2012. If you are not sending your comments by email, an electronic file containing the submissions should also be provided (Windows format, Word). Please address your submission to the following Canadian securities regulatory authorities: British Columbia Securities Commission Alberta Securities Commission Saskatchewan Financial Services Commission Manitoba Securities Commission Ontario Securities Commission Autorité des marchés financiers New Brunswick Securities Commission Superintendent of Securities, Prince Edward Island Nova Scotia Securities Commission Securities Commission of Newfoundland and Labrador Superintendent of Securities, Yukon Territory Superintendent of Securities, Northwest Territories Superintendent of Securities, Nunavut

Please deliver your comments only to the addresses that follow. Your comments will be distributed to the other participating CSA member jurisdictions. The Secretary Ontario Securities Commission 20 Queen Street West Suite 1900, Box 55 Toronto, Ontario M5H 3S8 Fax: (416) 593-2318 E-mail: comments@osc.gov.on.ca M e Anne-Marie Beaudoin Corporate Secretary Autorité des marchés financiers 800, square Victoria, 22 e étage C.P. 246, tour de la Bourse Montréal (Québec) H4Z 1G3 Fax: 514-864-6381 E-mail: consultation-en-cours@lautorite.qc.ca Please note that comments received will be made publicly available and posted at www.osc.gov.on.ca and on the websites of certain other securities regulatory authorities. We cannot keep submissions confidential because securities legislation in certain provinces requires that a summary of the written comments received during the comment period be published. 6. Questions If you have any questions, please refer them to any of the following: Frédéric Duguay Legal Counsel, Corporate Finance Ontario Securities Commission 416-593-3677 fduguay@osc.gov.on.ca Katie DeBartolo Accountant, Corporate Finance Ontario Securities Commission 416-593-2166 kdebartolo@osc.gov.on.ca

Lucie J. Roy Senior Policy Advisor Service de la réglementation Surintendance aux marchés des valeurs Autorité des marchés financiers 514-395-0337, ext 4464 lucie.roy@lautorite.qc.ca Ashlyn D’Aoust Legal Counsel, Corporate Finance Alberta Securities Commission 403-355-4347 ashlyn.daoust@asc.ca Sheryl Thomson Acting Manager, Legal Services Corporate Finance British Columbia Securities Commission 604-899-6778 sthomson@bcsc.bc.ca July 26, 2012

APPENDIX A PROPOSED CHANGES TO COMPANION POLICY 21-101CP MARKETPLACE OPERATION 1. The changes proposed to Companion Policy 21-101CP Marketplace Operation are set out in this Appendix. 2. Subsection 10.1(6) is replaced with the following: An “investment grade corporate debt security” is a corporate debt security that is rated by a designated rating organization, or its DRO affiliate, that is at or above one of the following rating categories or that is at or above a category that preceded or replaces one of the following rating categories: Designated Rating Long Term Debt Short Term Debt Organization DBRS Limited BBB R-2 Fitch, Inc. BBB F3 Moody’s Canada Baa Prime-3 Inc. Standard & Poor’s BBB A-3 Ratings Services (Canada) 3. The changes become effective on ●, 2012.

APPPENDIX B PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS 1. National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations is amended by this Instrument. 2. Section 8.21 is amended (a) in subsection (1), by (i) replacing “approved credit rating” with “designated rating”, (ii) replacing “approved credit rating organization” with “designated rating organization”, (iii) after the definition of “designated rating organization”, by adding the following definition: “DRO affiliate” has the same meaning as in section 1 of National Instrument 25-101 Designated Rating Organizations;, and (b) in subparagraph (2)(b), by (i) replacing “an approved credit rating” with “a designated rating”, and (ii) replacing “an approved credit rating organization” with “a designated rating organization or its DRO affiliate”. 3. Schedule 1 of Form 31-103F1 Calculation of Excess Working Capital (calculating line 9 [market risk]) is amended by replacing “Moody’s Investors Service, Inc. or Standard & Poor’s Corporation” with “Moody’s Canada Inc. or its DRO affiliate or Standard & Poor’s Rating Services (Canada) or its DRO affiliate”. 4. This Instrument comes into force on ●, 2012.

APPENDIX C PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 33-109 REGISTRATION INFORMATION 1. National Instrument 33-109 Registration Information is amended by this Instrument. 2. Form 33-109F6 Firm Registration is amended by replacing, in Schedule 1 of Form 31-103F1 Calculation of Excess Working Capital (calculating line 9 [market risk]), “Moody’s Investors Service, Inc. or Standard & Poor’s Corporation” with “Moody’s Canada Inc. or its DRO affiliate or Standard & Poor’s Rating Services (Canada) or its DRO affiliate”. 3. These amendments come into force on ●, 2012.

APPENDIX D PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 41-101 GENERAL PROSPECTUS REQUIREMENTS 1. National Instrument 41-101 General Prospectus Requirements is amended by this Instrument. 2. Section 1.1 is amended (a) by replacing “approved rating organization” with “designated rating organization”, (b) after the definition of “designated foreign jurisdiction”, by adding the following definition: “DRO affiliate” has the same meaning as in section 1 of NI 25-101;, and (c) after the definition of “NI 14-101”, by adding the following definition: “NI 25-101” means National Instrument 25-101 Designated Rating Organizations;. 3. Subsection 7.2(2) is amended by replacing “approved rating organization” with “designated rating organization or its DRO affiliate”, and 4. Subsection 10.1(4) is amended by replacing “an approved rating organization” with “a designated rating organization or its DRO affiliate”. 5. This Instrument comes into force on ●, 2012.

APPENDIX E PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 44-101 SHORT FORM PROPSECTUS DISTRIBUTIONS AND COMPANION POLICY Schedule E-1 Proposed Amendments to National Instrument 44-101 Short Form Prospectus Distributions 1. National Instrument 44-101 Short Form Prospectus Distributions is amended by this Instrument. 2. Section 1.1 is amended (a) by replacing the definition of “approved rating” with the following: “designated rating” means, for a security, a rating issued by a designated rating organization, or its DRO affiliate, that is at or above one of the following rating categories or that is at or above a category that replaces one of the following rating categories: Designated Rating Long Term Debt Short Term Debt Preferred Shares Organization DBRS Limited BBB R-2 Pfd-3 Fitch, Inc. BBB F3 BBB Moody’s Canada Baa Prime-3 “baaa” Inc. Standard & Poor’s BBB A-3 P-3 Ratings Services (Canada) (b) in the definition of “cash equivalent”, by (i) replacing “an approved rating” wherever it occurs with “a designated rating”, and (ii) replacing “approved rating organization” with “designated rating organization or its DRO affiliate”, and (c) after the definition of “current annual financial statements”, by adding the following definition: “DRO affiliate” has the same meaning as in section 1 of National Instrument 25-101 Designated Rating Organizations;.

3. Section 2.3 is amended (a) in the title, by replacing “Approved Rating” with “Designated Rating”, (b) in paragraph (1)(e), by (i) replacing “an approved rating” wherever it occurs with “a designated rating”, (ii) in subparagraph (e)(ii), (A) replacing “an approved rating organization” with “a designated rating organization or its DRO affiliate”, (B) replacing “approved rating” with “designated rating”, and (iii) in subparagraph (e)(iii), replacing “approved rating organization” with “designated rating organization or its DRO affiliate”. 4. Subsection 2.4(1) is amended by (a) replacing “an approved rating” wherever it occurs with “a designated rating”, (b) replacing “an approved rating organization” wherever it occurs with “a designated rating organization or its DRO affiliate”, (c) replacing “any approved rating organization” wherever it occurs with “any designated rating organization or its DRO affiliate”, (d) in clause (c)(i)(B), replacing “approved rating” with “designated rating”, and (e) in clause(c)(ii)(B), replacing “approved rating” with “designated rating”. 5. Subsection 2.6(1) is amended by (a) replacing “an approved rating” wherever it occurs with “a designated rating”, (b) in subparagraph (c)(ii), (i) replacing “an approved rating organization” with “a designated rating organization or its DRO affiliate”, (ii) replacing “approved rating” with “designated rating”, and

(c) in subparagraph (c)(iii), replacing “approved rating organization” with “designated rating organization or its DRO affiliate”. 6. Item 7.9 of Form 44-101F1 is amended by replacing “securities of the issuer that are outstanding, or will be outstanding,” with “the securities being distributed”. 7. This Instrument comes into force on ●, 2012.

Schedule E-2 Proposed Changes to Companion Policy 44-101CP Short Form Prospectus Distributions 1. The changes proposed to Companion Policy 44-101CP Short Form Prospectus Distributions are set out in this Schedule. 2. Subsection 1.7(1) is changed (a) in the title, by replacing “Approved rating” with “Designated rating”, (b) by replacing “an approved rating” wherever it occurs with “a designated rating”, and (c) by replacing “rating agency” wherever it occurs with “designated rating organization or its DRO affiliate”. 3. Section 2.2 is changed by replacing “approved rating” with “designated rating”. 4. Section 2.4 is changed by (a) replacing “an approved rating” wherever it occurs with “a designated rating”, and (b) replacing “approved rating organization” with “designated rating organization or its DRO affiliate”. 5. The changes become effective on ●, 2012.

APPENDIX F PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 44-102 SHELF DISTRIBUTIONS AND COMPANION POLICY Schedule F-1 Proposed Amendments to National Instrument 44-102 Shelf Distributions 1. National Instrument 44-102 Shelf Distributions is amended by this Instrument. 2. Section 2.3 is amended (a) in subsection (1), by (i) replacing “approved rating non-convertible securities” with “designated rating non-convertible securities”, (ii) replacing “an approved rating” wherever it occurs with “a designated rating”, and (iii) replacing “approved rating organization” with “designated rating organization or its DRO affiliate”. (b) in subsection (2), by (i) replacing “an approved rating” wherever it occurs with “a designated rating”, and (ii) replacing “approved rating organization” with “designated rating organization or its DRO affiliate”. (c) in subsection (3), by (i) replacing “approved rating” wherever it occurs with “designated rating”, (ii) replacing “an approved rating” wherever it occurs with “a designated rating”, (iii) in clause (b)(iv)(B), replacing “an approved rating organization” wherever it occurs with “a designated rating organization or its DRO affiliate”, and

(iv) in clause (b)(iv)(C), replacing “approved rating organization” wherever it occurs with “designated rating organization or its DRO affiliate”. 3. Subsection 2.4(3) is amended by (a) replacing “approved rating” wherever it occurs with “designated rating”, (b) replacing “an approved rating” wherever it occurs with “a designated rating”, (c) replacing “an approved rating organization” wherever it occurs with “a designated rating organization or its DRO affiliate”, and (d) replacing “any approved rating organization” wherever it occurs with “any designated rating organization or its DRO affiliate”. 4. Section 2.6 is amended by (a) replacing “approved rating” wherever it occurs with “designated rating”, (b) replacing “an approved rating” wherever it occurs with “a designated rating”, (c) replacing “an approved rating organization” wherever it occurs with “a designated rating organization or its DRO affiliate”, and (d) replacing “any approved rating organization” wherever it occurs with “any designated rating organization or its DRO affiliate”. 5. This Instrument comes into force on ●, 2012.

Schedule F-2 Proposed Changes to Companion Policy 44-102CP Shelf Distributions 1. The changes proposed to Companion Policy 44-102CP Shelf Distributions are set out in this Schedule. 2. Subsection 2.6(2) is changed by replacing “approved rating organizations” with “designated rating organizations or their DRO affiliates”. 3. The changes become effective on ●, 2012.

APPENDIX G PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS 1. National Instrument 45-106 Prospectus and Registration Exemptions is amended by this Instrument. 2. Section 1.1 is amended (a) by replacing “approved credit rating” with “designated rating”, (b) by replacing “approved credit rating organization” with “designated rating organization”, and (c) after the definition of “director”, by adding the following definition: “DRO affiliate” has the same meaning as in section 1 of National Instrument 25-101 Designated Rating Organizations;. 3. Paragraph 2.34(2)(b) is amended (a) by replacing “an approved credit rating” with “a designated rating”, and (b) by replacing “an approved credit rating organization” with “a designated rating organization or its DRO affiliate”. 4. Subsection 2.35(b) is amended (a) by replacing “an approved credit rating” with “a designated rating”, and (b) by replacing “an approved credit rating organization” with “a designated rating organization or its DRO affiliate”. 5. Paragraph 3.34(2)(b) is amended (a) by replacing “an approved credit rating” with “a designated rating”, and (b) by replacing “an approved credit rating organization” with “a designated rating organization or its DRO affiliate”. 6. Subsection 3.35(b) is amended (a) by replacing “an approved credit rating” with “a designated rating”, and

(b) by replacing “an approved credit rating organization” with “a designated rating organization or its DRO affiliate”. 7. This Instrument comes into force on ●, 2012.

APPENDIX H PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 51-102 CONTINUOUS DISCLOSURE OBLIGATIONS 1. National Instrument 51-102 Continuous Disclosure Obligations is amended by this Instrument. 2. Section 1.1 is amended (a) by replacing the definition of “approved rating organization” with the following: “designated rating organization” means (a) each of DBRS Limited, Fitch, Inc., Moody’s Canada Inc., and Standard & Poor’s Ratings Services (Canada), including their DRO affiliates; or (b) any other credit rating organization that has been designated under securities legislation;, and (b) after the definition of “date of transition”, by adding the following definition: “DRO affiliate” has the same meaning as in section 1 of National Instrument 25-101 Designated Rating Organizations;. 3. This Instrument comes into force on ●, 2012.

APPENDIX I PROPOSED CHANGES TO NATIONAL POLICY 51-201 DISCLOSURE STANDARDS 1. The changes proposed to National Policy 51-201 Disclosure Standards are set out in this Appendix. 2. Subsection 3.3(7) is changed by replacing “approved rating agencies” with “designated rating organizations”. 3. Footnote 19 is changed by replacing “approved rating” with “designated rating”. 4. The changes become effective on ●, 2012.

APPENDIX J PROPOSED AMENDMENTS TO NATIONAL INSTRUMENT 81-101 MUTUAL FUND PROSPECTUS DISCLOSURE 1. National Instrument 81-101 Mutual Fund Prospectus Disclosure is amended by this Instrument. 2. Subsection 2.6(4) is amended by replacing “an approved rating organization” with “a designated rating organization or its DRO affiliate”. 3. This Instrument comes into force on ●, 2012.