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WIDE-RANGING RULE AND POLICY CHANGESENDORSED BY VANCOUVER STOCK EXCHANGE BOARD

 VANCOUVER, British Columbia, May 25 /PRNewswire/ -- The Board of Governors of the Vancouver Stock Exchange (VSE) has endorsed a wide ranging series of rule and policy changes affecting the exchange's member brokerage firms and other market participants, including listed companies and their directors and officers.
 The package of reforms is a result of six months of deliberations by a special committee of the board convened in early December. The 15-person committee was formed to address criticisms of certain market practices which were seen to be inhibiting the development potential of the exchange as an international venture capital marketplace.
 "The adoption of these recommendations will improve the way business is done on the Vancouver Stock Exchange," said VSE President Donald J. Hudson, who chaired the special committee which consisted of both member and non-member governors of the exchange, senior brokers, key exchange staff and representatives of the legal community and the British Columbia Securities Commission.
 Some of the changes will become effective May 26, 1993, while others will take effect in the near future, once various exchange committees have agreed on a schedule for implementation. There are a few recommendations beyond the jurisdiction of the exchange which will be referred to the British Columbia Securities Commission for their consideration.
 Key initiatives address the manner and the extent of participation by member brokerage firms in financings and the responsibility of member firms for the quality of companies listing on the exchange and of the people involved with listed companies.
 In considering its recommendations, the committee took into account rules and policies of other exchanges and the impact of changes on the VSE's competitive position.
 Recommendations to take immediate effect center on brokers' participation in financings.
 A new Client Preference Rule on public offerings will be enacted to ensure that the public purchasing securities will take preference over the members conducting the financing. The rule will ensure full disclosure of the extent of participation of those brokers. As a minimum standard, 85 percent of a primary issue must be available to the public.
 Distribution requirements for Statement of Material Fact financings have been changed to parallel those of Initial Public Offerings. Sponsoring member firms will no longer be required to distribute to other members up to 20 percent through the facilities of the exchange.
 As well, the number of warrants which can be granted to brokers has been substantially reduced from 50 percent to 25 percent of an issue.
 In response to concerns about short selling, the new rules prohibit brokers, acting as a principal or on behalf of clients, from purchasing securities on a public financing and then delivering those securities to cover a short sale made previously.
 Other changes being implemented May 26 include upgrading of listing requirements, particularly those applying to commercial/industrial companies seeking a listing on the exchange's Venture Board. For example, before going public non-resource companies will need to raise at least $400,000 in seed capital, up from $275,000, and to have spent at least $300,000 on the business, up from $200,000.
 Companies involved in the exploration and development of natural resource properties will have to meet slightly higher standards, but will not be able to change their business undertaking without prior exchange approval.
 The exchange's Senior Board listing standards will be revised extensively and will be substantially similar to those of the Toronto Stock Exchange.
 Changes to be implemented in the near future include:
 -- Requiring member brokerage firms conducting public offerings and putting forth companies for listing to sponsor those issuers for a period of at least one year after the offering or the listing.
 Sponsors will be required to follow prescribed suitability guidelines to determine the appropriateness of the company for listing. Once a company is listed or the financing completed, the sponsoring broker will be required to undertake ongoing oversight responsibilities for a period of one year.
 "These changes should improve the quality of listings and ensure that the brokers conducting financings have an ongoing obligation to the marketplace," said Hudson.
 Sponsoring brokers who fail to comply with the exchange's new sponsorship regulations will be subject to disciplinary proceedings.
 -- Subjecting directors and officers of listed companies to a new policy on director acceptability. Persons without adequate experience in running a public company, or who make excessive payments for investor relations services or who do not meet other prescribed standards could be deemed unsuitable to act as an officer or director and be subject to removal.
 -- Establishment of a central VSE-administered data bank on officers and directors of listed companies and other market participants, accessible to member firms seeking information on acceptability of individuals.
 -- New controls on the size of investor relations contracts. Investor relations payments which exceed $100,000 will be subject to exchange approval.
 -- Defining appropriate activities and standards for promoters which can be used by brokers in reviewing promotional activities being undertaken on behalf of companies they are sponsoring on the exchange.
 An Executive Summary of the Special Committee outlining the full range of specific changes and a full report are available through the VSE Public Affairs department.
 -0- 5/25/93
 /CONTACT: David A. Laundy of the Vancouver Stock Exchange, 604-689-3334/


CO: Vancouver Stock Exchange ST: British Columbia IN: FIN SU:

JB -- LA023 -- 2211 05/25/93 13:39 EDT
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Date:May 25, 1993
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