Discretionary Services Regulations — 10
 arrangement, contract, understanding or agreement, determines the manner in which the interest is voted but the solicitation of proxies or the seeking of instructions with respect to the completion of proxies in respect of the exercise of voting interests is not considered to be such an arrangement, contract, understanding or agreement. Effective control of licensee (3) For the purposes of this section, effective control of a licensee or its undertaking includes situations in which (a) a person controls a majority of the voting interests of the licensee directly or indirectly, other than by way of security only; (b) a person has the ability to cause the licensee or its board of directors to take a course of action; or (c) the Commission, after a public hearing of an application for a licence or in respect of an existing licence, determines that a person has effective control of the licensee or its undertaking and sets that determination out in a decision or public notice. Obligation to obtain Commission’s prior approval (4) Except as otherwise provided under a condition of its licence, a licensee shall obtain the Commission’s prior approval of any act, transaction or agreement that, directly or indirectly, would result in (a) a change by any means of the effective control of its undertaking; (b) a person that alone (i) controls less than 30% of the voting interests of the licensee having control of 30% or more of those interests, (ii) controls less than 30% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 30% or more of those interests, (iii) owns less than 50% of the issued common shares of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee, or (iv) owns less than 50% of the issued common shares of a person that has, directly or indirectly, effective control of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee; or (c) a person together with an associate (i) that control less than 30% of the voting interests of the licensee having control of 30% or more of those interests, (ii) that control less than 30% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 30% or more of those interests, (iii) that own less than 50% of the issued common shares of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee, or (iv) that own less than 50% of the issued common shares of a person that has, directly or indirectly, effective control of the licensee owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee. Obligation to notify Commission (5) A licensee shall notify the Commission, within 30 days after the day on which the act or transaction occurs or the agreement is entered into, of the occurrence of any act or transaction or the entry into any agreement that, directly or indirectly, results in (a) a person that alone (i) controls less than 20% of the voting interests of the licensee having control of 20% or more but less than 30% of those interests, (ii) controls less than 20% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 20% or more but less than 30% of those interests, (iii) controls less than 40% of the voting interests of the licensee having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee, or (iv) controls less than 40% of the voting interests of a person that has, directly or indirectly, effective control of the licensee having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee; or (b) a person