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The Certification of Disclosure in Annual and Interim Filings and Your Insurance


March 29, 2004


Emmanuelle Poupart

Rule 52-109 adopted by the “Autorité des marchés financiers” (previously the Quebec Securities Commission) with respect to the Certification of disclosure in issuers’ annual and interim filings, will soon come into force. This rule will also come into force in Alberta, Manitoba, Ontario, Nova Scotia, Newfoundland, Labrador, Saskatchewan and Nunavut. The same principles will be applied through directives in New-Brunswick, Prince Edward Island and in Yukon while they will be applied through a code in the North-West Territories.


By virtue of this rule, the Chief Executive Officer and Chief Financial Officer must certify that the financial information found in the annual and interim filings is fair and does not contain any misrepresentation and that they have established and maintained disclosure controls and procedures concerning the financial information and have evaluated their effectiveness1. This rule is the equivalent of the American law Sarbanes-Oxley2 which was adopted after the many financial scandals which disrupted the financial market.


With these new responsibilities, the Chief Executive Officer and Chief Financial Officer are exposed to potential civil, administrative and penal procedures in case of a faulty certification. It is thus essential that as Chief Executive Officer and Chief Financial Officer you verify whether the Directors and Officers Insurance Policy subscribed by your company covers such procedures. Although, generally speaking, the Directors and Officers Insurance Policy should cover such procedures, it is mandatory that you carefully read the policy wording including the definitions, namely of Wrongful Act, to determine whether coverage would be available3. Because of the financial scandals of the past few years, the insurance market has changed and continues to change. The insurance market has responded to these financial scandals by tightening the policy wording and by adding new exclusion clauses. Hence, you should carefully review your policy wording at the time of renewal. It is important to remember that it is preferable to make such a review before you are involved in a claim.


1 For more information, please refer to “Securities Regulators adopt New Rules” publication of February 23, 2004, http:/ Moreover, on April 14 next, we will hold a breakfast seminar on the subject in collaboration with accounting firm Raymond Chabot Grant Thornton.


2 For more information, please refer to “Sarbanes-Oxley Act Expends Corporate Governance and Accounting requirements for SEC registered NON-U.S. Companies” Legal update (August 2002) http:/


3 For more information, please refer to “Sarbanes-Oxley, the SEC and your insurance” and “Insurance News” (March 2003) http:/


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