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Generating
National Policy 51-201 Disclosure Standards
Part III Overview of the Statutory Prohibitions Against Selective Disclosure
Section 3.4

Necessary Course of Business Disclosures and Confidentiality

(1) If a company discloses material information under the “necessary course of business” exception, it should make sure those receiving the information understand that they cannot pass the information onto anyone else (other than in the necessary course of business), or trade on the information, until it has been generally disclosed.

(2) We understand that companies sometimes disclose material information pursuant to a confidentiality agreement with the recipient, so that the recipient is prevented from further informing anyone of the material information. Obtaining a confidentiality agreement in these circumstances can be a good practice and may help to safeguard the confidentiality of the information. However, there is no exception to the prohibition against “tipping” for disclosures made pursuant to a confidentiality agreement. The only exception is for disclosures made in the “necessary course of business.” Consequently, there must still be a determination, prior to disclosure supported by a confidentiality agreement, that such disclosure is in the “necessary course of business.”