When Information May Be Kept Confidential

In restricted circumstances, disclosure of material information

concerning the business and affairs of a listed company may be

delayed and kept confidential temporarily where immediate

release of the information would be unduly detrimental to the

interests of the company.

Examples of instances in which disclosure might be unduly

detrimental to the company’s interests are as follows:

a) Release of the information would prejudice the ability of

the company to pursue specific and limited objectives or to

complete a transaction or series of transactions that are

under way. For example, premature disclosure of the fact

that a company intends to purchase a significant asset

may increase the cost of making the acquisition.

b) Disclosure of the information would provide competitors

with confidential corporate information that would be

of significant benefit to them. Such information may be

kept confidential if the company is of the opinion that

the detriment to it resulting from disclosure would outweigh

the detriment to the market in not having access

to the information. A decision to release a new product, or

details on the features of a new product, may be withheld

for competitive reasons. Such information should not be

withheld if it is available to competitors from other sources.

c) Disclosure of information concerning the status of ongoing

negotiations would prejudice the successful completion

of those negotiations. It is unnecessary to make a series of

announcements concerning the status of negotiations

with another party concerning a particular transaction. If it

seems that the situation is going to stabilize within a short

period, public disclosure may be delayed until a definitive

Policy Statement on Timely Disclosure

announcement can be made. Disclosure should be made

once “concrete information” is available, such as a final

decision to proceed with the transaction or, at a later point

in time, finalization of the terms of the transaction.

It is the policy of the Exchange that the withholding of material

information on the basis that disclosure would be unduly

detrimental to the company’s interests must be infrequent and

can only be justified where the potential harm to the company

or to investors caused by immediate disclosure may reasonably

be considered to outweigh the undesirable consequences of

delaying disclosure, keeping in mind at all times the considerations

that have given rise to the Exchange’s immediate

disclosure policy. While recognizing that there must be a tradeoff

between the legitimate interests of a company in maintaining

secrecy and the right of the investing public to disclosure

of corporate information, the Exchange discourages delaying

disclosure for a lengthy period of time, since it is unlikely

that confidentiality can be maintained beyond the short term.

Maintaining Confidentiality

If disclosure of material information is delayed, complete

confidentiality must be maintained. In the event that such

confidential information, or rumours respecting the same, is

divulged in any manner (other than in the necessary course

of business), the company is required to make an immediate

announcement on the matter. Market Surveillance must be

notified of the announcement in advance in the usual manner.

During the period before material information is disclosed,

market activity in the company’s securities should be closely

monitored. Any unusual market activity probably means that

news of the matter is being disclosed and that certain persons

are taking advantage of it. In such case, Market Surveillance

should be advised immediately, and a halt in trading will be

imposed until the company has made disclosure on the matter.

At any time when material information is being withheld from

the public, the company is under a duty to take precautions to

keep such information completely confidential. Such information

should not be disclosed to any officers or employees of the

company, or to the company’s advisors, except in the necessary

course of business. The directors, officers and employees of a

listed company should be reminded on a regular basis that

confidential information obtained in the course of their duties

must not be disclosed.